Just got round to watching Mario Draghi's speech in Rimini in the original Italian. It is easily the most important speech on Europe so far this year and I hope someone (@GillesGressani?) publishes it in English and other EU languages soon.
Some highlights:
- 1/20 Draghi draws a stark line where others (indeed, some in Brussels) prefer to fudge: between the EU as an economic regulator and the EU as a geopolitical power
- 2/20 He casts doubt on current under-coordinated and unstrategic defence splurges: "We have been pushed by [the US] to increase military spending [...] but in ways that probably do not reflect Europe's interests"
- 3/20 Draghi describes Europe as, essentially, a "spectator" where recent foreign policy events - from the Donbas to the Red Sea to the Caspian - are concerned
- 4/20 Draghi confronts the rise of populism in Europe, but asserts: "it's important to ask what the real object of this scepticism is" (and casts doubt on whether its fundamental targets are really European values like democracy, freedom, independence, sovereignty, equality)
- 5/20 He identifies three distinct shifts:
faith in markets -> industrial policy
rules-based-order -> military and geoeconomic power
limited states -> a new statism
faith in markets -> industrial policy
rules-based-order -> military and geoeconomic power
limited states -> a new statism
- 6/20 Really important, this: Draghi brushes aside EU household gods. "we must not try to extrapolate past achievements to the future: [they] were actually responses to the specific challenges of that time and tell us little about our ability to address those facing us today."
- 7/20 Draghi notes that the EU's adaptation to the earlier, neoliberal era came naturally - going with the grain of a project built around opening markets, but that the challenges of today are fundamentally different. Spot-on observation.
- 8/20 He stresses that while EU's first decades could draw on memories of war & the goodwill of strong economic growth, those have both dried up (correct, but for my money this was the weakest part of his speech: as the experience in central and eastern Europe is v different).
- 9/20 Draghi killer stat 1: if EU reduced internal market barriers to level of US, productivity growth would hit 7% over 7 years (compared with current 2%).
- 10/20 Draghi killer stat 2: for all that Europe is spending more on defence, it is wasting vast sums of that investment. EU internal barriers amount to a 64% tariff on machinery and a 95% tariff on metals.
- 11/20 The result: "slower tenders, higher costs, and increased purchases from suppliers outside the EU... all because of obstacles we impose on ourselves"
- 12/20 Draghi argues that Europe cannot simply sit back as: "The United States and China openly use their control over strategic resources and technologies to gain concessions"
- 13/20 Draghi killer stat 3: while US investment in chips focuses on scale (projects from $30 to $65 billion), European investment is fragmented (typically targeting projects between $2 and $3 billion).
- 14/20 Draghi killer stat 4: EU highly unlikely to meet its target of increasing its global market share in chips from 10% today to at least 20% in 2030.
- 15/20 Plenty of European leaders are good at outlining the above problems. A difference is that Draghi is proposing solutions proportional to the challenge.
- 16/20 Draghi solution: 1: a "28th" legal regime for projects of common European interest and their joint financing
- 17/20 Draghi solution 2: a clear distinction between good and bad debt, as "only forms of common debt can support large-scale European projects that insufficient, fragmented national efforts would never be able to implement." 🎯
- 18/20 Draghi solution 3: a different European attitude. From hopelessness to faith in change; from despair at the future to confidence (NextGenerationEU, anyone?); from declinism to solutions; from crisis management to long-term vision
- 19/20 A dash of optimism: Draghi notes that for all of Europe's self-imposed brakes, "European firms are adopting next-generation digital technologies, including AI, at a pace comparable to the US". Imagine Europe with the brakes off.
- 20/20 Citing the Commission, Draghi sets a yardstick for European investments in the future: €1.2 trillion per year.
Daunting? Yes
Doubtful? Yes
Absolutely necessary? Also yes
Daunting? Yes
Doubtful? Yes
Absolutely necessary? Also yes
Draghi concludes with his most radical message: one of European agency. "We can change the trajectory of our continent."
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