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The European Union is staring into the abyss, warns a damning report, unless it undergoes a radical transformation of its industrial policy and secures a massive influx of investment.
The study, sanctioned by the European Commission, sounds the alarm on the EU’s precarious position, cautioning that failure to act will have far-reaching and devastating consequences.
A landmark review, chaired by the respected Mario Draghi, former President of the European Central Bank, has presented the European Union with a daunting challenge: inject an additional €800 billion (£675 billion) into its annual budget or risk falling irreparably behind the United States and China.
European leaders have been warned that a failure to boost the EU’s productivity will lead to an impossible trade-off between competing priorities, forcing them to choose between tackling climate change, stimulating economic growth, and advancing foreign policy objectives.
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The report’s unsettling conclusions have emerged at a pivotal moment, just as the EU is poised to confirm its new Commission, the powerful executive body tasked with steering the bloc through treacherous waters, now made even more turbulent by these findings.
Commission President Ursula von der Leyen, fresh from her re-election to a second five-year term in July, had entrusted Mario Draghi, a former Italian prime minister and esteemed economist, with leading the review last year, seeking his expertise to tackle the EU’s pressing challenges.
Shrouded in secrecy, a small team carefully crafted the report, fueling intense speculation in Brussels as its publication was postponed by several months, heightening anticipation and expectations among EU insiders and policymakers.
With spending proposals described as “unprecedented”, the report calls for a massive investment equivalent to 5% of the EU’s GDP, more than twice the scale of the landmark Marshall Plan that spurred Europe’s post-war recovery, and reflecting the enormity of the bloc’s present-day needs.
