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Former European Central Bank chief Mario Draghi is calling for a substantial increase in investment and a coordinated industrial policy to boost the economic situation in the European Union. In a new report on EU competitiveness, Draghi proposes a €800bn boost in investment and closer coordination among European countries to prevent falling behind the US and China. He emphasizes the need for a new industrial strategy with 170 different proposals and highlights Europe’s weak productivity and slowing growth.
The report also points out challenges such as declining income growth, a slowdown in world trade, and the loss of a main energy supplier. Draghi suggests the need for increased investment in defense and warns that Europe can no longer rely on population growth to drive economic expansion. The report is expected to shape the debate on EU competitiveness and influence the priorities of the upcoming European Commission.
Draghi’s proposal for joint investment projects funded by common debt instruments, akin to eurobonds, has sparked controversy. The report also highlights the need for Europe to secure access to critical raw materials and improve its defense industry. Draghi’s report warns that Europe must address its declining position in advanced technologies to drive future growth. The report concludes with a stark declaration that Europe is facing an existential challenge, urging policymakers to deliver prosperity, equity, freedom, peace, and democracy to maintain the EU’s relevance.
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