A year ago, her specialist Executive European Union (EU), Mario Draghipresented his 400 -page report on EU competitiveness.
Since then, Mario Draghi’s report is more commonly mentioned in Brussels than any other study. Some even call it the European Commission’s “Bible”. “The Draghi report has become the economic doctrine of the European Union,” EU Industry Commissioner Stefan Sezurne told Handelsblatt. “Everything we have proposed since then follows this line.”
Sezurne lists what he considers the most important EU projects of the last twelve months: “The shock of simplification, the rejuvenation of the Capital Markets Union, the new strategy for the internal market, the” Made in Europe “, the Competitiveness Fund – this is an unprecedented dynamic.”
According to a study by Think Tank European Policy Innovation Council, however, only one tenth of the Draghi exhibition has been implemented. One fifth has been partially applied. It should be noted that two enormous events have been mediated: one is the EU re -equipment program (March 2025) and later NATO’s decision to defensive expenditure 5% of GDP (June 2025), while in between (April 2025) the tariff started …
Which of the former president of the ECB has actually followed by the European Union – and where does it still need to cover the difference? One year after the publication of the Draghi exhibition, Handelsblatt is considering the four most important points.
1. Industrial Policy
Draghi’s initial diagnosis is that the EU is further lagging behind in competition with the US and China – in innovation, trade and defense. The gap in productivity and investment is expanded. To cope with this “existential threat”, it makes more than 300 recommendations.
The most important proposal is a new industrial policy. Draghi demands the EU to ensure that the basic industries remain in Europe and that Epirus will depend less on foreign countries. Critical technologies include semiconductors and renewable energy. Supply chains must also become safer.
The committee welcomed this point “with great enthusiasm,” says Jeromin Zetelmeier, director of Think Tank Bruegel based in Brussels. In this way, Draghi legitimized the “protectionism instinct” that, in particular, France has long been.
In the first 100 days of her second term, Commission President Ursula von der Laien presented the “Agreement on Net Industry”. The so -called business plan for Europe aims to restore European industry to growth track – with a combination of more subsidies and less bureaucracy.
The automotive industry was the first to benefit. The automakers were temporarily excluded from the sanctions that would be due this year if the CO2 emissions of their fleet for 2025 were not respected.
Most of the measures of the project, however, are in the long run. Among other things, the EU intends to introduce targets for products manufactured in Europe. 40% of green technologies, such as wind and solar power stations, are to be manufactured in the EU in the future.
The EU has also relaxed state aid legislation so governments can now more easily grant state aid to support strategically important or even problematic areas. This makes, for example, the implementation of the German industrial electricity price, which allows the state to support energy -efficient companies. This overturns the concept of state aid law, says Zetelmeier. With the “Agreement on Clean Industry”, the Commission abandoned its liberal worldview.
Michael Hitter, director of the Institute of German Economy (IW), points out that, in addition to industrial policy, structural reforms are also necessary. It considers the regulation of the European labor market as a major obstacle to Europe’s failure to become a top technological continent. The US has more flexible protection than redundancies.
2. Deepening of the single market
One of Draghi’s main recommendations is the completion of the European Single Market. Several sectors continue to operate largely within national borders – in particular the energy and financial sector. Draghi argues that reducing these obstacles can significantly increase productivity.
The 27 national energy networks, for example, would have to be connected cross -border to reduce energy prices in the long run. However, this has often failed due to different national interests. France, for example, does not want to become a transit country for Spain’s cheap solar energy, but it probably wants to sell its own nuclear energy to Germany.
The European Commission is planning a bill to expand the network. However, it is not clear who will bear the huge cost. A charge on electricity prices would increase energy costs for consumers and businesses – thereby exacerbating Europe’s disadvantage as a place of power.
Even the big project of a Union of Banks and Capital Markets, which the EU has been seeking for more than ten years, has made little progress.
EU Finance Commissioner Maria Luis Albukerke has so far only presented a draft law to facilitate the securitization of bank loans and, therefore, the possible increase in lending. Beyond that, there is only one “road map” for the coming years. Controversial issues, such as a common European deposit warranty system for banks, have been postponed.
The national barriers are 100% tailored to cross -border financial services, according to a new report by the AFME financial lobby. Due to the minimum capital requirements in individual EU countries, banks cannot transfer their funds between their European subsidiaries and invest where they will make the highest profit. This discourages banks from operating cross -border.
Draghi’s call for greater adoption of the single market has not so far sparked an opinion on the capitals. “Here, we see the classic conflict between national interests and what would be better for Europe,” says Bruegel CEO Zetelmayer.
3. Reduction of bureaucracy
Draghi sees another disadvantage for the location in the regulations. By 2019, the EU had voted 13,000 laws, compared to only 5,000 in the US, according to its report. It is less and more targeted regulations.
The Commission has faced a great deal to reduce bureaucracy. In the first step, it simplified three controversial parts of the “Green Agreement” legislation: the EU Directive on the Supply Chain, the Sustainability Report and the EU classification. Its original intention was simply to align the laws better without abandoning their goals.
However, the supply chain law relieves a large number of companies – as well as the carbon border adaptation mechanism. Further reforms will follow, including those of the EU Regulation on Deforestation.
IW economist, Hutter, stresses that proposals for reducing bureaucracy must now be approved quickly by the European Parliament, otherwise there will be stagnation. “It is vital for companies to know what they should and should not apply now,” he says.
However, there are doubts about the effectiveness of these initiatives. While it is right to abolish reference requirements, there is a risk that the bureaucracy will be a substitute for the action, says Niels Redeker of Think Tank Jacques Delors Center. Reducing bureaucracy alone cannot close the productivity gap. Funds are required for this.
Zetelmayer also critically sees the Commission’s activism. Von der Layen wants to send a message quickly. Therefore, laws are now postponed or their scope is reduced. However, the crucial question of whether the regulation is fundamentally rational or not is not raised.
4. Investments value of billions
In his report, Draghi estimates EU additional investment needs of € 800 billion per year – and makes a comparison with the Marshall Plan, which rebuilt Germany after World War II.
This amount must be raised mainly from the private sector, Draghi argues. Consequently, Europeans must urgently integrate their capital markets closer to attract more capital in Europe. But he also believes that the public sector must invest significantly more – including through new EU debt for common public goods.
The European Commission has so far been very hesitant in this regard. The budget plan for the period 2028 – 2034 includes a new € 400 billion competitive fund for the funding of industrial policy. Funding for agriculture and regions will also be renovated to invest more in research, innovation and security.
Overall, however, the budget is slightly increasing – because net contributors such as Germany reject both the increase in contributions and the new EU debt. The EU budget structure is based on Draghi’s proposals, says economist Redeker. However, its financial power is inadequate.
Most EU governments also do not plan significant investments, as a Bruegel analysis of medium -term spending plans of the 27 Member States showed. While Germany has announced mass additional costs, several other countries must reduce costs. Therefore, the pure surplus remains only small, says Zettelmayer. Europe is far from the investment boom requested in the Draghi report.
Conclusion
Commission representatives point out that the implementation of Draghi’s recommendations will take time. “It was always clear to us that such a fundamental and structural change as the one suggested by Draghi would not happen from day to day,” EU Commissioner for the climate, Hukkra, told Handelsblatt. “This will keep us busy throughout the term of the Commission and possibly afterwards.”
The Sezurne Industry Commissioner admits that things could move faster. “The Draghi phenomenon is often eroded as soon as the reforms are discussed by the Member States or even internally by those who have not understood historical change,” the Frenchman says.
From the perspective of an economist, Draghi’s diagnosis of European competitiveness is more timely than ever. Redeker claims that he has become even more accurate in the last year. Pressure in the European economy has continued to grow due to the surplus production capacity of China and US duties. In response, the EU must respond to economic power.