EURACTIV The Brief – Draghi Report: urgent but insufficiently concrete By Thomas Moller-Nielsen | Euractiv

 EURACTIV

The Brief – Draghi Report: urgent but insufficiently concrete 

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of Euractiv Media network.

By Thomas Moller-Nielsen | Euractiv

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Author name

Thomas Moller-Nielsen

Economy Journalist

Location: Brussels

Languages: English, French, Russian

Expertise: Economics, Energy

Location Expertise: Brussels

 

 Est. 7min 17:36

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Opinion

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During the public presentation of his long-awaited report on the future of Europe’s competitiveness earlier on Monday (9 September), Mario Draghi said that the “essence” of the report could be summed up in just two words, “urgency and concreteness”.

The urgency of the report – and Europe’s current economic problems – cannot be disputed.

The Italian technocrat lays out in painstaking detail the “existential challenge” posed by Europe’s weak growth rate, which is caused by (among other things) lagging productivity, high energy prices, a severe lack of investment, insufficiently integrated capital markets, and a scarcity of skilled workers.

Many of the policy proposals in his 400-page report are also reasonably concrete, especially as they concern the energy sector. (For instance, he calls for the creation of a new EU legal framework that would override national law for cross-border energy grids.)

When it comes to the most ‘controversial’ policy proposals, however, Draghi is often surprisingly vague, or cautious, in a way that makes his specific recommendations difficult to explain.

Common borrowing

On the (deeply) politically divisive issue of how to finance the “massive investments” of up to €800 billion required to facilitate the green and digital transition, and boost defence spending, Draghi was exceedingly cautious.

A new joint debt at the EU level was called for, but only “if the political and institutional conditions are in place,” he said

Of course, it is hard to imagine that fiscally hawkish countries like the Netherlands and Germany would ever consider the “political conditions” to be met.

Meanwhile, Draghi argued that productivity growth will also help increase fiscal capacity for investments to enhance productivity – but did not offer a clear way out of the current vicious circle that sees the EU falling short on both.

Competition policy

Similarly, Draghi writes that the EU’s competition policy should “continue to adapt” to avoid becoming “a barrier” to growth and innovation.

He also noted that future merger evaluations in the tech sector, “should assess how the proposed concentration will affect future innovation potential in critical innovation areas.”

But when asked at the press conference earlier today, which specific areas of competition policy should be reviewed and which previous attempted mergers should have been permitted, Draghi largely dodged the question.

Indeed, other than calling for the “discontinuation” of state aid, except in the case of “cross-border projects” and stressing that the EU’s merger evaluation process should be significantly sped up, he largely resorted to cliches.

“As competition policy is concerned […] it should have in mind two new dimensions: one is innovation and the second one is resilience,” he said, adding that competition policy should also be “more forward-looking” rather than “prudential.”

Confusingly Draghi’s final report notes that “security and resilience”, rather than “innovation and resilience”, should “get more weight” by the EU’s competition authorities in future.

In any case, the relevant questions surely are: How, exactly, are these rather vague “new dimensions” to be determined? Can they conflict with one another? And, to the extent that these notions can be suitably determined, what exact weight should the EU competition authorities place upon them in future?

Trade policy 

Echoing remarks made in a speech in June, Draghi’s report also notes that there “may be some industries where domestic producers have fallen so far behind,” such that imposing defensive trade measures, like tariffs, “would only impose excessive deadweight costs on the [EU] economy.”

Asked by Euractiv which specific sectors – other than the perhaps obvious case of the solar panel industry – may have fallen too far behind, Draghi said, “[I] just want to be clear on this, that this report is [not]… advocating that a sort of a granular selection process, or which sectors should be taken care of or should be abandoned.”

One might be forgiven for thinking that a report on the future of EU competitiveness should determine which specific sectors Europe can be competitive in.

Or is this asking too much?

The Roundup

Mario Draghi’s long-awaited competitiveness report published this morning (9 September) calls for a fundamental re-think of the EU’s green growth drive. The former Italian Prime Minister stands by the bloc’s climate goals – but wants less ‘green’ and more ‘growth’.

Europe is facing an “existential challenge” to increase its productivity, Mario Draghi’s long-awaited report on European competitiveness states, with the main priorities focused on advancing the tech sector and ensuring a successful transition towards climate neutrality.

Mario Draghi called for a division of labour across the continent, for cash on projects of European interest and a buy-European preference, as member states mull reforming the bloc’s defence industry.

Polish authorities successfully dismantled a cyber-espionage group linked to Belarusian and Russian intelligence services, which had been conducting malicious activities in Poland, reported Polish Minister of Digitization Krzysztof Gawkowski on  Monday (9 September).

Look out for…

European Economic and Social Committee organises a conference on “Climate migration: Where to next?”  in Brussels.

The think tank Bruegel organises a conference on “The DMA and Market Structure” in Brussels.

The third day of the informal meeting of EU agriculture and fisheries ministers in Budapest, Hungary.

European Commission Vice President Margaritis Schinas visits Armenia, where he meets President Vahagn Khachaturyan, Prime Minister Nikol Pashinyan, Deputy Prime Minister Mher Grigoryan, and Foreign Affairs Minister Ararat Mirzoyan

Health and Food Safety Commissioner Stella Kyriakides holds a videoconference call with  Minister of Health of Canada Mark Holland, to launch the European Union-Canada Health Policy Dialogue.

Health and Food Safety Commissioner Stella Kyriakide meets  Director of the European Institute for Animal Law and Policy Olga Kikou.

EU foreign policy chief Josep Borrell visits Egypt, where he will meet President Abdel Fattah el-Sisi, Field Marshal and Minister of Defence of Egypt. Abdel Meguid Ahmed Sakr, Director of the Egyptian General Intelligence Service Abass Kamel, visits the joint EU/UNICEF project at the Sheikh Zuweid Hospital in Rafah, and meets the Egyptian Red Crescent Society (ERCS).

European Commissioner for Home Affairs Ylva Johansson meets  Assistant Minister of Interior for Combating Organized CrimeMufid Mohamed Mufid, in Cairo, Egypt.

European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi participates in the Interparliamentary Conference for the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP) in Budapest, Hungary.

European Commissioner for Budget and Administration Johannes Hahn meets government representatives and investors to promote the EU as an issuer, in Singapore.

European Commissioner for Internal Market Thierry Breton meets with representatives from the automotive industrial ecosystem.

[Edited by Rajnish Singh]

 

    

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