Draghi competitiveness report not a blueprint for a future-fit economy

• It’s positive that Draghi reinforces the need for cooperation at the EU-level as the foundation of competitiveness
• The economic potential of EU regions and the link between competitiveness and cohesion is overlooked
• Only a united Europe can be a global player – Draghi doesn’t give enough attention to how to tackle 2-speed Europe
• The report overlooks the economic security dimension of the climate crisis
• Overall, this is a missed opportunity to fundamentally rethink how we do economic policy that’s fit for the future

In a major report on Europe’s economic competitiveness published today, Mario Draghi the former Italian prime minister sets out far-reaching recommendations for the future of EU competitiveness.

ZOE Institute for Future-Fit Economies said that Draghi’s work can go a long way to boosting competitiveness, but stressed that it should not be treated as a comprehensive blueprint and more would be needed to build lasting prosperity. Long-term competitiveness can only come from a united Europe it said.

European Commission President, Ursula von der Leyen, tasked Draghi to come up with these recommendations last year in a bid to make the bloc more competitive, especially versus the US and China.

Jakob Hafele, Executive Director and head economist at ZOE Institute for Future-fit Economies, said:

“There is some good stuff in this report, notably the parts on energy prices and electrification and the central role of the EU, but it should not be treated as a blueprint – important aspects have been overlooked. 

 “Europe’s approach to competitiveness must be long-term and it must be sustainable, otherwise we are simply storing up problems for the future.  

“The challenge to achieve long-term competitiveness in Europe is for EU leaders to embrace a truly pan-European mindset. Draghi rightly identifies that sustained competitiveness will require much more coordination and funding than we have seen before.

“On industrial policy, the risks of further industrial concentration are not well addressed. While Draghi acknowledges that metropolitan areas are better placed to benefit from industrial modernisation, he misses the opportunity to show how regional manufacturing potential in economically left-behind regions can be unlocked.”  

ZOE Institute’s proposal for a unified industrial transition for Europe pact (UnITE pact) suggests an EU-level industrial policy approach that coordinates funding for the development of strategic cross-EU value chains in high-potential regions. The Pact aims to use the full economic potential of all regions to strengthen EU competitiveness.