In September 2024, former European Central Bank President Mario Draghi unveiled his highly anticipated report on the future of European competitiveness, often referred to as the “Draghi Report.” Commissioned by European Commission President Ursula von der Leyen, following her 2023 State of the Union address, the report aims to address Europe’s economic challenges and could serve as a cornerstone for EU policymaking in the coming years. With Europe facing a stark choice between stagnation and radical reform, Draghi advocates for a new industrial strategy built on three pillars:
- Closing the Innovation Gap: Maintaining Europe’s leadership in manufacturing and fostering breakthrough technologies to boost productivity.
- Decarbonization and Competitiveness: Developing a joint strategy to lower energy costs and continue the transition to a circular economy.
- Strategic Independence: Strengthening Europe’s security and reducing dependency on external sources to bolster global geopolitical influence.
To ensure these goals are met, Draghi’s proposed EU industrial strategy rests on four key building blocks:
- Full Implementation of the Single Market: Draghi stresses that Europe is losing 10% of its GDP potential due to the fragmentation of the Single Market. Harmonized rules and the removal of barriers are crucial for attracting investment and supporting decarbonization efforts
- Coordinated Policies: Aligning industrial, competition, and trade policies across the EU.
- Massive Investment Plan: Allocating funds to finance the transition to a more competitive and sustainable European economy.
- Reforming EU Governance: Streamlining the regulatory framework to reduce the burden on businesses, particularly in sectors like waste management and packaging
One notable aspect of the report is its emphasis on reducing external dependencies through circularity, with a focus on critical raw materials. Draghi recommends the creation of a true Single Market for waste and circularity, alongside stronger enforcement of existing waste management laws to foster the reuse and recycling of secondary raw materials. Additionally, Draghi highlights the need for simplification of EU legislation, particularly in waste and packaging, where inconsistent national implementations add complexity and costs to businesses. The report’s findings and recommendations are poised to influence the EU’s upcoming Clean Industrial Deal, a key initiative announced by von der Leyen, which is expected to be revealed shortly after the 100-day mark of her mandate.