Mario Draghi propone un radicale cambiamento per l'Unione Europea a La Hulpe

Summary

The speaker addresses Europe's competitiveness challenges, highlighting the need for a strategic shift. They critique past inward-focused policies and the lack of a unified industrial approach, which have left Europe vulnerable to external competition and dependencies. The speaker calls for a radical change, advocating for a European Union that embraces decarbonization, independent energy systems, integrated defense, and innovation in tech and manufacturing. They emphasize the importance of scale, public goods provision, and securing essential resources to maintain competitiveness in a rapidly changing global landscape.

Takeaways

• 🌟 **Competitiveness Redefined**: The concept of competitiveness in Europe is evolving, shifting focus from relative positioning to long-term productivity growth.
• 🔄 **Past Strategies Critiqued**: Previous European strategies, focused on lowering wage costs and procyclical fiscal policies, weakened domestic demand and social models.
• 🧐 **Inward Focus Corrected**: Europe's previous inward focus, viewing fellow members as competitors, is being recognized as a mistake, especially in sectors with common interests like defense and energy.
• 🔍 **External Competitiveness Recognized**: There's a new awareness of the importance of external competitiveness, as other regions employ policies to enhance their position and redirect investment.
• ⛓ **Supply Chain Dependencies**: China's and the US's strategies are leading to overcapacity and a threat to European industries, highlighting the need for secure supply chains.
• 💡 **Innovation and Technology Investment**: Europe is lagging behind the US and China in investment in digital and advanced technologies, including defense, indicating a need for a strategic approach.
• 🛡️ **Protection from Unfair Competition**: A strategy is needed to shield traditional industries from an unlevel global playing field caused by regulatory asymmetries and subsidies.
• 🌱 **Resource Security for Ambitions**: Europe's ambitious climate policy requires a plan to secure the supply chain of critical minerals and resources to avoid increased dependencies.
• 🔗 **Enabling Scale as a Priority**: The need for scale is emphasized to increase investment and market share in key industries, suggesting a move towards more collaborative procurement and market focus.
• 🏗️ **Public Goods and Common Investment**: There's a call for coordinated investment in public goods like home energy grids and supercomputing infrastructure, which individual countries cannot efficiently provide alone.
• 💼 **Capital Markets Union Importance**: The Capital Markets Union is highlighted as a key component for mobilizing private investment and addressing the investment gap in the EU.

Q & A

What is the main issue with Europe's approach to competitiveness according to the speaker?

The main issue is that Europe has had the wrong focus on competitiveness, turning inwards and seeing competitors as themselves, rather than looking outwards and addressing external competitiveness as a serious policy question.

What did Paul Krugman argue about focusing on competitiveness in 1994?

Paul Krugman argued that focusing on competitiveness is a dangerous obsession because long-term growth comes from raising productivity, which benefits everyone, rather than trying to improve one's relative position against others.

How did Europe's strategy post-sovereign debt crisis impact its domestic demand and social model?

Europe pursued a strategy of lowering wage costs relative to each other and a procyclical fiscal policy, which only weakened domestic demand and undermined the social model.

What is the speaker's view on the current state of the world and its impact on Europe?

The speaker believes that the world is changing rapidly and has caught Europe by surprise, with other regions not playing by the rules and devising policies to enhance their competitive position, making Europe potentially dependent on them.

How is China enhancing its competitive position according to the script?

China is aiming to capture and internalize all parts of the supply chain in green and advanced technologies and is securing access to the required resources, leading to significant overcapacity in multiple sectors.

What is the United States doing to attract high-value domestic manufacturing capacity?

The United States is using large-scale industrial policy to attract high-value domestic manufacturing capacity within their borders, including that of European firms, while using protectionism to shut out competitors and deploying geopolitical power to secure supply chains.

What does the speaker suggest is lacking in Europe's strategy for new technologies and traditional industries?

Europe lacks a strategy for keeping pace in the race for leadership in new technologies and for shielding its traditional industries from an unlevel global playing field caused by asymmetries in regulations, subsidies, and trade policies.

What are the three common threads for policy interventions mentioned in the report?

The three common threads are enabling scale, providing public goods, and securing the supply of essential resources and inputs.

Why is scale important for Europe's industries and how does fragmentation affect it?

Scale is important because it allows for increased investment and market share capture in key industries. Fragmentation in Europe, such as in the defense industry and telecommunications, is holding it back from leveraging its natural size advantage.

What is the role of public goods in the European Union's strategy and why is joint action necessary?

Public goods are investments from which all benefit, but no single country can carry out alone. Joint action is necessary to avoid under-delivery relative to needs, such as in climate, defense, and other sectors where lack of coordination leads to inefficiently low investment.

How does the speaker propose to address the challenge of securing essential resources and skilled workers?

The speaker suggests a comprehensive strategy covering all stages of the critical mineral supply chain, possibly including a dedicated EU critical mineral platform for joint procurement and securing diversified supply. For skilled workers, multiple stakeholders need to work together to ensure the relevance of skills and shape flexible upskilling pathways.

What does the speaker emphasize as necessary for the European Union to restore its competitiveness?

The speaker emphasizes the need for a renewed partnership among member states, a redefinition of the Union, and a radical change in how Europe organizes itself, with immediate action in sectors with the highest exposure to green, digital, and security challenges.