These steps were mentioned by Mario Draghi, the former president of the European Central Bank and former Italian Prime Minister, according to a report published by Reuters and reviewed by Sky News Arabia, in a detailed memo explaining what the European bloc needs if it wants to keep up with its most prominent competitors, the United States and China, economically.
“The situation at the moment is really worrying,” Draghi said at a news conference in Brussels.
“Growth has been slowing down for a long time in Europe, but we ignored it… Now we can’t ignore it anymore. Now the circumstances have changed,” he added.
In the detailed memo, which is about 400 pages long, Draghi said the EU needs investment of between 750 and 800 billion euros ($829-884 billion) a year, or up to 5 percent of gross domestic product.
This growth rate is much higher than the 1-2 percent of the EU’s GDP in the Marshall Plan to rebuild Europe after World War II.
“The European Union must act on several fronts,” he stressed.
“It’s about doing this or we will suffer slow agony,” Draghi warned.
Draghi said in the note that EU countries have already responded to the new reality and are seeking to change it, but he added that their effectiveness is limited by a lack of coordination.
Different levels of support between countries were disrupting the single market, political fragmentation limited the scope needed to compete globally, and EU decision-making was “complex and slow.”
The report suggested that so-called qualified majority voting — rather than the need for unanimity — be expanded to cover more areas, and as a last resort, like-minded countries be allowed to move forward on some projects on their own.
While existing national or EU funding sources will cover some of the huge investment amounts needed, Draghi said new sources of co-financing – which countries led by Germany have been reluctant to agree to in the past – may be needed.
German Finance Minister Christian Lindner said joint borrowing would not solve the EU’s problems and that Germany – the 27-nation bloc’s largest economy – would not agree to it.
Analysts said, according to Reuters, that the European Union may delay implementing Draghi’s proposals.
“Political difficulties in Germany and France, and long-standing divisions among other EU member states, are likely to prevent the big leap forward in integration that Draghi describes,” analysts at Eurasia Europe said.
“Moreover, recent political developments in France, despite the appointment of Michel Barnier as Prime Minister last week, make us even more sceptical about the EU’s ability to deliver on truly meaningful fiscal ambitions.”
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