EU faces decline without €800bn annual investment boost

Mario Draghi's report emphasizes the urgent need for the EU to increase its annual investment by €750bn-€800bn to combat stagnation and prevent social unrest. The report highlights the detrimental effects of the Covid pandemic and the Ukraine war on international trade, which have exacerbated existing economic challenges. Draghi warns that Europe’s productivity is alarmingly low and that the energy crisis has underscored the necessity for the EU to reduce its reliance on external energy sources. The report outlines 170 recommendations aimed at fostering a more resilient economy and enhancing competitiveness in a global landscape marked by trade tensions and military conflicts. Draghi points out that the EU has been experiencing slower growth compared to the US for the past two decades, with many successful startups relocating to the US due to barriers in scaling up within Europe. Additionally, the report addresses the demographic challenges posed by declining fertility rates, which hinder population growth and economic expansion. Draghi stresses the importance of coordinated policy efforts among EU countries to reverse the trend of economic decline and to adapt to the changing global environment. Ursula von der Leyen, the European Commission president, suggested that a common approach to funding could involve the EU borrowing from international bond markets. This proposal aims to ensure that shared European priorities are adequately financed, reflecting the need for a unified strategy to address the economic challenges facing the EU.