Draghi warns EU on competitiveness amid rising challenges

Mario Draghi, former president of the European Central Bank, has issued a stark warning regarding the European Union's economic future. In a report commissioned by Ursula von der Leyen, he highlighted the EU's struggle with persistent sluggish growth, which poses a significant threat to its social model. Draghi emphasized the urgent need for substantial investments from both governments and businesses, alongside a reevaluation of regulations and competition rules to foster the creation of industrial champions in Europe. The report reflects a broader concern echoed by various leaders, including French President Emmanuel Macron, who described the situation as a 'moral risk.' Italian Prime Minister Giorgia Meloni succinctly captured the challenge by stating that while America innovates and China replicates, Europe is bogged down by regulation. This shift in global economic power is evident, with the eurozone's share of global GDP declining from 22% two decades ago to just 14% today. Despite the urgency of the situation, Draghi's proposals have met with skepticism. His suggestion for common borrowing to fund investments has already been dismissed by Germany's finance minister, who believes it won't address the underlying issues. Additionally, the call for deregulation faces significant hurdles, as past attempts to improve Europe's economic performance have yielded little success. The conversation surrounding these challenges raises critical questions about Europe's future. As some corporate leaders express concerns about being 'shackled to a corpse' within the EU, there is a growing sentiment that Europe must adapt and potentially move towards a model more akin to that of the United States to revitalize its economy.