One year on from the publication of his report on the future of European competitiveness (see EUROPE 13478/1), Mario Draghi believes that Europe “finds itself in an even more difficult situation”.
The cause: strategic dependencies that have not been reduced, geopolitical and commercial instability, and the EU’s slowness to act to resolve its problems.
Speaking at a conference organised by the European Commission on 16 September, the former Italian Prime Minister called on the EU to invest massively in innovation.
While he welcomed several initiatives taken by the Commission over the last 12 months, Mario Draghi did not fail to point out the slowness with which decisions are taken and actions implemented. “We say it is simply how the EU is built. That a complex process with many actors must be respected. Sometimes inertia is even presented as respect for the rule of law. That is complacency”, he declared.
And he pointed to the examples of China and the United States, which are making much faster progress.
Simplify to close the technology gap. In the race for new technologies, Mario Draghi praised the Commission’s work on artificial intelligence (AI) in particular. But, in order to go further, he called for the barriers to business growth to be broken down. He in particular attacked legislation governing the digital sector, such as the AI Act and the General Data Protection Regulation (GDPR).
On this subject, Mario Draghi once again denounced the “cost” that the GDPR imposes on European companies. “The only change on the table so far is an easing of record keeping and extending SME derogations to mid-caps. Broader reform toward simpler, harmonised rules is still vague”, he regretted.
The AI Act is “another source of uncertainty”, in his view. He focused on the work expected on the risks associated with critical infrastructures. “In my view, implementation of this stage should be paused until we better understand the drawbacks. More broadly, enforcement [of the AI Act] should rest on ex post assessment, judging models by their real-world capabilities and demonstrated risks”, he continued.
Boosting investment. The former ECB President also addressed the issue of the EU budget, which was the subject of a Commission proposal in July. He called for a sufficiently resourced European Competitiveness Fund (see EUROPE 13682/6).
In his report to the Commission in 2024, Mario Draghi estimated the need for public and private investment at almost €800 billion a year.
As a result, the envelope earmarked for the Horizon Europe research programme – €175 billion – will not be sufficient to fund cutting-edge research, in his view.
Having made these observations, he returned to the issue of joint indebtedness, “whether at EU level or between a coalition of Member States”. In his view, such borrowing would make it possible to finance large-scale projects in areas where spending is too fragmented and no longer produces satisfactory results. And he cited sectors such as cutting-edge innovation, defence research and network matrices.
Improving the use of public funds. Mario Draghi also addressed the issue of State aid and competition rules for mergers. These are due to be revised in 2027, but that is far too late, in his view.
In addition, the EU should use the full potential of public procurement to create markets in Europe. This would be relevant in sectors such as semi-conductors for the defence industry, or green steel and aluminium, said Mario Draghi. (Original version in French by Léa Marchal and Isalia Stieffatre)