The Draghi report – what’s next?

Summary

The discussion revolves around the Draghi report on European competitiveness, which has been highly anticipated and recently published. The report advocates for increased EU borrowing and investment, aligning with French sovereignist views. It addresses the need for strategic autonomy, green transition, and digitalization, proposing significant changes like leveraging private investments through public funding. The conversation also touches on the report's potential impact on policy, including state aid, competition, digitalization, and the Capital Markets Union. The participants express both optimism and skepticism about the report's ability to drive change in the EU's economic strategy.

Takeaways

• 📜 The Draghi report is considered historic due to the anticipation and buzz surrounding its release, but its impact on policy remains uncertain.
• 💡 The report emphasizes the need for increased EU borrowing and a larger EU budget to fund strategic investments, aligning with French sovereignist views.
• 🌐 It calls for a balance between national fiscal consolidation and EU production, strategic autonomy, decarbonization, and digitalization.
• 💼 Draghi's personal credibility and the backing of the European Commission lend weight to the report's proposals, making debate on them inevitable.
• 💡 The report suggests leveraging private investments through public funding mechanisms, such as guarantees or co-financing, to stimulate economic activity.
• 🔄 There's a push for deregulation, especially in the context of climate policy, with Draghi highlighting the EU's over-regulation compared to the US.
• ♻️ Decarbonization is presented as a means to enhance competitiveness, with a notable emphasis on the need for more nuclear energy and funding for related projects.
• 🚫 The report does not delve into specific technologies like blockchain or tokenization, indicating a gap in addressing modern financial technologies.
• 🌐 There's a strategic shift towards smaller, targeted trade agreements rather than large-scale free trade agreements, reflecting a change in EU trade policy.
• 📉 The report criticizes the Carbon Border Adjustment Mechanism (CBAM) for its complexity and potential to undermine European industries' competitiveness.

Q & A

What is the main focus of the Draghi report discussed in the transcript?

The Draghi report focuses on European competitiveness, with a strong emphasis on the need for increased EU borrowing and investment to address issues such as decarbonization, digitalization, and strategic autonomy.

Why was the Draghi report delayed according to the discussion?

The report was delayed likely because it includes a call for more EU borrowing, which could have been a difficult sell for Ursula von der Leyen at the start of her second mandate, as it would require approval from member states.

What is the significance of the 800 billion in additional investment mentioned in the transcript?

The 800 billion in additional investment represents the amount needed annually, which is about 5% of GDP, to address the EU's competitiveness and is deemed impossible to find through private funding alone.

How does the Draghi report suggest leveraging private investments?

The report suggests leveraging private investments by providing guarantees or co-financing from public funds, referencing the Juncker plan as a positive example of such a program.

What is the report's stance on nuclear energy and its role in competitiveness?

The Draghi report highlights the need for more nuclear energy, tackling a political taboo in some member states, and sees it as a vehicle for competitiveness.

How does the Draghi report address the issue of overregulation in the EU?

The report criticizes the EU's overregulation, pointing out the high number of regulations passed compared to the US, and suggests a need for deregulation, particularly in areas like climate policy.

What is the report's perspective on targeted trade agreements versus large-scale free trade agreements?

The Draghi report suggests a shift towards smaller, targeted trade agreements in specific sectors, recognizing the challenges in concluding large-scale free trade agreements.

How does the report envision the use of the EU budget to fund European public goods?

The report sees the EU budget as a vital tool for funding European public goods, advocating for a significantly larger, more efficient, and targeted budget financed through consistent borrowing at the European level.

What are the implications of the Draghi report for state aid and competition policy?

The report suggests significant shifts in state aid policy, such as funding commercially available technologies, and introduces the concept of an 'innovation defense' in merger cases, which could alter the implementation of competition policy.

Why isn't blockchain technology mentioned as part of the technologies to unlock private investments in the report?

The transcript suggests that industry advocacy has not effectively placed blockchain on the EU's political agenda, and the report focuses on more traditional methods of mobilizing investments without delving into newer technologies like blockchain.