"In the opinion of the former ECB president, the EU
must invest a high three-digit billion amount every year in order to keep up
with America and China.
These are his ideas.
Mario Draghi, the former president of the European Central
Bank and Italian Prime Minister, presented no fewer than 170 proposals plus
sub-proposals to improve competitiveness in the EU to the EU Commission on
Monday. Commission President Ursula von der Leyen commissioned him to write a
report a year ago. The Italian reported that it was originally supposed to be
ready in February. However, new aspects kept coming up, so the publication had
to be postponed several times.
Draghi's diagnosis
The Italian states that there is a productivity and
investment gap between the EU and the USA. In the EU, the share of public and
private investment must grow by 4.4 to 4.7 percentage points of economic output
in the coming years, the Italian demands. That is more than double the aid from
the Marshall Plan after the Second World War and corresponds to minimum annual
investments of 750 to 800 billion euros. Without higher productivity, Europe
cannot be a "leader in new technologies, a beacon of climate
responsibility and an independent actor on the world stage".
Debt as a response
To finance these investments, Draghi is more or less bluntly
calling for new community debt. Commission President Ursula von der Leyen
responded by pointing out that she also believes more investment funds for the
EU are essential. For the time being, however, she sees only two ways to
achieve this: higher contributions from member states to the EU budget or
completely new financial sources (own resources) for the EU.
So far, further community debt has been ruled out because
the debt-financed EU reconstruction fund is time-limited.
As an additional step
to finance the investments, the Italian is calling for the planned capital
market union to be pushed forward as quickly as possible. It should make it
possible for the many projects proposed by Draghi to also be financed by
private investors.
Reducing bureaucracy
The EU has passed 13,000 legislative acts since 2019,
compared to a generous estimate of 5,000 in the USA, Draghi made clear. This is
particularly a burden on small and medium-sized enterprises, which do not have
the means to meet the requirements. Draghi is therefore supporting the goal of
eliminating 25 percent of reporting requirements and is calling for a dedicated
Vice President for Reducing Bureaucracy in the Commission. Above all, however,
he criticizes the fact that the EU is slowing down innovation with its
regulation, which is based heavily on precautionary measures. This is
particularly true in the technology sector. Draghi cites the new AI law and the
General Data Protection Regulation as examples of laws that are
"killing" small, innovative companies in Europe.
Competitiveness and climate
One premise of the Draghi report was that it would not shake
up the phase-out of fossil fuels. In fact, he sees the expansion of renewable
energy, but also nuclear energy, as the solution to a central problem: high
energy prices. By reforming the electricity market, the EU should ensure that
the lower prices of renewable sources reach the end user and that the more
expensive coal-fired electricity does not determine the price.
The internal energy market should be completed and the joint
purchase of gas should be strengthened. Draghi wants to promote green
technologies based on the American "Inflation Reduction Act" (IRA),
i.e. not only the capital costs, but also the operating costs. He also calls
for quotas for local production. For energy-intensive industries such as metal
production or chemicals, Draghi calls for a pragmatic approach that enables
them to keep up with international competition through financial aid and more
free emission rights.
Automotive industry
The Volkswagen crisis is currently showing Germans how
important the automotive industry is for prosperity. Draghi devotes a separate
chapter in his report to the industry, which accounts for 14 million direct and
indirect jobs in the EU. He calls for a separate industrial action plan for the
automotive industry. The aim is to specifically answer how the EU can keep up
with China and the USA, given the "significant support" for the
industry there.
It is also intended to ensure that the industry has access to
the necessary raw materials, as well as to create the conditions for
digitalization to progress. Draghi also addresses the controversial ban on
combustion engines in 2035. He advocates overturning the ban as quickly as
possible and replacing it with a technology-neutral approach that leaves room
for cars powered by climate-neutral e-fuels.
Foreign trade policy and trade with China
Draghi defines security policy as a prerequisite for
sustainable growth. The EU must therefore use trade policy to secure access to
important raw materials. It must not shy away from building up stocks of raw
materials or semiconductors.
The EU should not generally rely on greater
isolation from China.
Draghi sees the dilemma that the import of cheap green
technology helps the EU to achieve its climate goals, but on the other hand is
a threat to production in Europe. He therefore advocates a "mixed
strategy" that only relies on protecting domestic production through
tariffs or quotas in individual cases. Draghi includes the EU's special tariffs
on electric cars produced in China. Draghi also wants to protect young,
innovative industries. However, in areas in which the EU has long been
dependent, such as the solar industry, he sees no point in doing so.
Reform of competition policy
Draghi wants to use competition policy more than before to
serve the European agenda he has formulated. He no longer wants to consider
whether national state aid distorts the internal market as the decisive
criterion for state aid control. Instead, subsidies that serve the common
interest - by which he means above all state support for the
"resilience" of companies, economic security and innovation - should
be promoted.
His proposals for reforming merger control go in a similar
direction. This should no longer be as "cautious" as before and
should focus on the effects in the future. Faster decisions are also important.
Draghi indirectly criticized the fact that the EU Commission banned the planned
merger of the train divisions of Siemens and Alstom in 2019. According to the
rules in force at the time, the decision was probably correct. However, the
rules must allow greater consideration of the common interest in the future. In
addition, the Commission's decisions must be regularly evaluated retrospectively.
New voting procedures
Draghi believes that the EU's decision-making processes are
too slow. He proposes extending qualified majority voting in the Council of
Ministers to more policy areas and abolishing the need for unanimous decisions.
As a last resort, like-minded countries should be allowed to go their own way
on some projects." [1]
Many good ideas. Big minus is the idea about the auto industry in the EU. Cars
are computers on wheels today. The EU is bad with computers. The car
industry in the EU will not survive, so we should stop wasting our
resources. We should switch completely to production of luxury cars
powered by e-fuels. The number of cars produced this way will be small.
Rest of the EU should find something else to do.
1. Draghis Plan
für die EU : Mehr
Schulden, weniger Bürokratie, starke Autobranche. Von Hendrik Kafsack, Werner
Mussler, Brüssel.
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