New findings from a report published in September 2024 indicate that the European Union requires an additional annual investment of 800 billion euros to compete with China and the United States. This amount represents more than 4% of the EU’s GDP, surpassing the Marshall Plan scale.
Former European Central Bank president Mario Draghi recommends regular issuance of common debt within the EU to address this need, similar to responses during the COVID-19 crisis. He advocates for massive defense investments and a new industrial strategy.
According to the European Policy Innovation Council (EPIC), only 11.2% of the 383 recommendations made have been fully accomplished. With partial progress considered, EPIC estimates the EU has implemented 31.4% of Draghi’s suggestions, with 46% in progress and 22.7% yet to be addressed.
EPIC highlights “striking sectoral disparities,” noting that transportation and critical raw materials lead progress due to supply chain security and the shift to electric vehicles. Conversely, energy and digitalization lag due to political sensitivities, complex regulations, and fragmented ownership.
Another evaluation mechanism, the “Draghi tracker” by the Joint European Disruptive Initiative, estimates a 14% implementation of Draghi’s top 20 recommendations.
A high-level conference in Brussels today will review the European Commission’s progress on these recommendations. The event, featuring Draghi and the Commission’s president, is not open to the press but streamed online.
It has been a year since Draghi released his report on European competitiveness, calling for an annual investment increase of 750 to 800 billion euros, equating to 4.4-4.7% of the community’s GDP in 2023.
“The financing needed for the EU to achieve its goals is vast, yet productive investment is weak despite substantial private savings,” the report stated. It noted that EU household savings in 2022 amounted to 1.39 trillion euros, compared to 840 billion in the U.S.
Draghi’s proposed transformations focus on accelerating innovation, promoting decarbonization, lowering high energy costs, and reducing geopolitical dependence.
“We are responding to the main bottlenecks identified in the Draghi report—from energy to capital, including investment and simplification,” stated Ursula von der Leyen, President of the European Commission, during her State of the Union address last Thursday.
