AFP, Budapest :
Europe must make radical reforms and ramp up investment to catch up with the United States or face a painful decline: that is the message of a report by former European Central Bank chief Mario Draghi that EU leaders will debate on Friday.
Draghi identified the smorgasbord of challenges that the European Union faces: sluggish economic growth, a slowdown in productivity, low innovation and rising dependencies on other countries for critical raw materials, including China.
Of particular concern for Draghi in his 400-page report published in September is the widening gap between the United States and Europe in terms of economic output, innovation and more.
The Italian ex-premier called for “a new industrial strategy for Europe”, with extra investment of up to 800 billion euros ($863 billion) a year and drastic policy changes.
For Draghi, his report is the antidote to avoid a “slow agony” of decline for Europe.
New trade era-
Draghi warns Europe the world is entering a new era of trade policy to which the bloc is “already adapting” but he warned against “the pitfalls of protectionism”.
That warning came even before Donald Trump won back the White House. The EU has new tools to tackle thorny trade issues — heeding the lessons of Trump’s first term that began in 2017 — but Draghi said their use “should be pragmatic and aligned with the overarching goal of raising the EU’s productivity growth”.