Mario Draghi’s alarm call on the European economy’s decline

The European Union (EU) is today faced with “an existential challenge” ; if she does not change, she will be condemned to “a slow agony”. Mario Draghi, the former president of the European Central Bank (ECB), sounded very alarmist on Monday, September 9, when he made public the report on competitiveness that the European Commission had commissioned a year ago. A few days earlier, on September 4, in front of the presidents of the political groups of the European Parliament, the former Italian Prime Minister had even confided that he was making “nightmares” when he imagines what awaits the Twenty-seven if nothing is done.

The facts are there: the European economy has fallen behind the United States, while China is inexorably catching up. « Real disposable income per capita has grown almost twice as fast in the United States as in Europe since 2000,” illustrates Mario Draghi. And, according to him, in the current state of affairs, there is no reason for this decline to stop.

Of course, the ageing of the population – by 2040, the population is expected to lose two million workers per year – allows the effects to be partially masked. “There are fewer and fewer of us sharing an ever smaller cake, we don’t see where the drama is”Mr Draghi sums up. Except that the challenges the Union faces in decarbonising its economy, taking the turn towards artificial intelligence or reducing dependencies in an increasingly unstable geopolitical context require it to act quickly.

Otherwise, there will not be enough left ” cake ” to Europeans to bring their model to life. “If Europe fails to become more productive, we will be forced to make choices. We will not be able to become a leader in new technologies, a model of climate responsibility and an independent player on the world stage. We will not be able to finance our social model. We will have to scale back some, if not all, of our ambitions.”estimates Mario Draghi.

“Huge investment needs”

This is the thesis put forward by the Italian economist who, throughout the 400 pages of his report, dissects the reasons for Europe’s decline and sets out his 170 proposals to change the situation. It is imperative, he believes, that Europeans equip themselves with a qualified workforce, that they focus on research, that they complete the construction of an internal market which remains unfinished, that they reduce the electricity bills of citizens and businesses (two to three times higher than in the United States) or that they seriously tackle the debureaucratization of its economy.

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