Mario Draghi (European Commission): A roadmap to relaunch competitiveness
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Mario Draghi, who is leading a special review for the European Commission, outlines a roadmap for restoring Europe’s global industrial leadership and avoiding a long-term decline. Interview.
Reversing Structural Decline Through Strategic Investment
Mario Draghi’s diagnosis of Europe’s economic stagnation rests on a paradox: despite having formidable internal strengths—a consumer market of four hundred million people, robust legal institutions, a skilled workforce, and leadership in sustainability—Europe’s industrial relevance is eroding. Productivity growth has flatlined, its share of global tech revenues has declined from twenty-two percent in 2013 to eighteen percent in 2023, and capital markets remain fragmented. High energy costs, lagging private investment, and demographic ageing compound the problem. For Draghi, this is not merely a cyclical downturn but a structural drift toward marginalisation unless decisive action is taken. His central thesis is that competitiveness must no longer be treated as a passive outcome of the single market but as a strategic priority. The roadmap he proposes pivots around six pillars that address root causes: accurate diagnostics, bold investment, sectoral transformation, digital and green transitions, economic resilience, and institutional reform. The goal is not to fine-tune policy at the margins but to trigger major economic shifts. Europe must close a five-percentage-point annual GDP investment gap with the United States and China. Without a comparable scale of financial commitment, it cannot hope to compete in advanced technologies or energy independence.
Synchronising Innovation, Investment and Energy Policy
Draghi identifies three interlinked levers essential for Europe’s competitive renewal: scaling up investment, narrowing the innovation gap, and restoring energy affordability. These are not parallel tracks but interdependent imperatives. Advanced digital infrastructure underpins both innovation and green transition. Likewise, large-scale investment relies on integrated capital markets and EU-level fiscal tools. Europe lags significantly behind in capital deployment toward technology and climate-related industries, leaving it dependent on external supply chains and exposed to geopolitical risks. According to Draghi, private investment will only rise if supported by credible long-term policies, simplified regulation, and targeted public incentives. He also underlines the strategic importance of energy: Europe’s industrial base will continue to erode if businesses cannot rely on competitively priced, secure energy sources. Addressing energy cost disadvantages requires investment in renewables, diversification of imports, and infrastructure modernisation. Fragmented national strategies, in his view, must give way to collective European action. Unified digital standards, interoperable technologies and shared innovation frameworks are the prerequisites for scale and resilience. This is not a call for protectionism but for proactive autonomy—a Europe able to lead in clean technology, digital transformation and strategic industry.
“If Europe cannot become more productive, we will be forced to choose.”
Execution, Governance and Institutional Reform
Draghi’s warning is clearest in his conclusions: Europe does not lack vision but suffers from execution paralysis. Overlapping national policies, redundant EU instruments and ambiguous priorities undermine the effectiveness of even sound initiatives. To counteract this, he advocates for governance reforms and centralised investment mechanisms. Large-scale European investment vehicles, possibly backed by joint guarantees or debt issuance, are essential to pool resources efficiently. These tools must be complemented by institutional clarity—simplified mandates, streamlined coordination, and reduced bureaucratic duplication. Sector-specific strategies are advised for energy-intensive manufacturing, defence, aerospace and pharmaceuticals, alongside horizontal reforms in finance and innovation ecosystems. Draghi emphasises regulation reform, including scale-up support, faster approval processes, and labour mobility facilitation. Policy must anticipate rather than react. Equally critical is resilience against foreign distortions in competition without retreating into economic nationalism. Strategic autonomy, he insists, requires not isolation but integration at scale. The ambition, in Draghi’s words, must match the challenge. Europe stands at a crossroads—either act boldly to reclaim industrial leadership or face irreversible decline.