What is Mario Draghi’s long-awaited report on EU competitiveness?

This article was originally published in English

Former Italian Prime Minister Mario Draghi will present this Monday an expected EU Competitiveness Reportwhich promises to offer a new vision of the economic capacity of the old continent.

Its conclusions, which were due in June, are due to be published late at a key moment in the EU’s political cycle. The report will set the tone for the next legislature just days before European Commission President Ursula von der Leyen hands over her duties to her new group of lieutenants.

Saving the bloc’s economy

During his eight years at the helm of the European Central BankDraghi pledged to do “whatever it takes” to defend the euro from the market turbulencebut now Von der Leyen has tasked him with save the entire economy of the bloc.

He has already given some hints about the content of his hundreds-page report, which is being prepared with the help of European Commission staff.

It will certainly stand out growing productivity gap with the United Stateswhose economy is now 50% larger than that of the EU, although 15 years ago they were equal.

In April, Draghi also spoke of the need to respond to massive subsidies paid by the US and China for strategic green technology, which challenge the global trade order.

What does the report include?

Leaks from his briefing with EU ambassadors last week suggest he will also discuss the Reducing the bloc’s dependence on the outsideclimate change and social inclusion, and will detail recommendations for ten key sectors, such as defence and energy.

In this sense, it is possible that many of his conclusions echo those he formulated at the beginning of the year. Enrico Lettaanother former Italian prime minister who had been tasked with finding formulas for boosting the EU single market.

One of the main questions is how Draghi, who headed Italy’s technocratic government between 2021 and 2022, plans to finance his plans.

In April, Letta suggested reserving a portion of national subsidies for EU projects, or use loans from the European Stability Mechanisma fund originally intended for the banking sector, to finance defense.

Any further proposals from Draghi – such as common borrowing through Eurobonds – could prove to be the most controversial and disputed element of his plans. His conclusions will likely clash with the criticism from the rightwhich will say it ignores the impact of immigration, and the left, which claims it is trying to deregulate and cut workers’ wages.

But it will also have to overcome institutional inertia; many describe the report as wake-up call to a complacent Brussels. The EU Council, which groups member states, has previously blocked many market reforms. But it can also call for a reorganization of the Commissionthe EU executive responsible for proposing new laws.

Von der Leyen may end up copying and pasting her plans into the mission cards she hands out to her new Commissioners on Wednesday, which could define his five-year term.