EU competitiveness: Draghi report calls for quick reforms!

EU competitiveness: Draghi report calls for quick reforms!

A key debate is currently gaining momentum in the European Economic Area: The European Parliament's Economic and Monetary Affairs Committee is discussing amendments to the influential Draghi report on the EU's competitiveness. This measure is intended to contribute to improving the Capital Markets Union and strengthening competitiveness within the European Union. Jörg Asmussen, General Manager of GDV, commented on the challenges and opportunities arising from this debate, particularly with regard to investments in infrastructure, climate protection and pension provision. The European capital market is perceived as fragmented, making efficient cross-border investments difficult. This leads to an urgent demand for simpler processes to improve capital flows, so Mario Draghi's report is seen as an important impetus.

The Draghi report, published on September 9, 2024, analyzes the EU's current challenges and opportunities and offers strategic approaches to promote growth and stability. He highlights the well-developed education and health systems and high standards of protection, but at the same time warns of declining growth due to weak productivity development. Draghi makes it clear that the current growth model is on a dangerous path due to unfavorable developments in foreign trade, energy supply and security. In order for the internal market, which includes around 440 million consumers, to remain operational, additional investments of at least EUR 750 billion per year are necessary in order to significantly increase the investment share of EU GDP.

Suggestions to improve competitiveness

Draghi proposes a European strategy that includes three main areas of action:

• Innovationslücke schließen: Die EU muss mehr in Forschung und Innovation investieren, um mit den USA und China Schritt zu halten.
• Integrierter Plan für Dekarbonisierung und Wettbewerbsfähigkeit: Wettbewerb im Energiebereich erfordert international wettbewerbsfähige Preise.
• Stärkung der Resilienz und Abbau von Abhängigkeiten: Die EU sollte ihre Abhängigkeit von einzelnen Lieferanten reduzieren, insbesondere von China.

To further strengthen competitiveness, Draghi also recommends a differentiated industrial policy that takes different sector groups into account. This includes importing decarbonization technologies and protecting labor-intensive sectors such as the automotive industry. In addition, the need to strategically support European know-how and production capacities is emphasized.

Future steps and political focus

Policy-making in the EU will have significant influence from the Draghi report, especially as the recommendations are in line with the strategic goals of the Federal Ministry for Economic Affairs and Climate Protection. The federal government has already decided on measures that are part of a common European approach to industrial policy. It also calls for the European governance structure to be improved in order to speed up decision-making processes and optimize coordination between Member States.

Overall, it is clear that the reforms contained in the Draghi report and the associated discussions in the European Parliament's Economic and Monetary Affairs Committee are crucial to sustainably increasing the EU's competitiveness. In particular, the initiative to introduce Europe-wide minimum standards for creditors' rights in the event of insolvency shows the desire to create uniform framework conditions that facilitate cross-border investments and can thus lead to a strengthening of the European capital market.

The European Parliament will discuss the amendments and submit them for a vote in both committee and plenary. This means that the course for a future-oriented development of the European economic landscape is in jeopardy.

GDV reports that…
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