Calls on the 27 to urgently address the fragmentation of the single market and capital markets
08 November 2024 . Updated at 11:03
The former Italian Prime Minister and former President of the ECB, Mario Draghiwarned this Friday that the victory of Donald Trump In USA makes the proposals contained in the report he prepared “even more urgent” to improve the economic competitiveness of the bloc and reduce the distance with other world powers.
“The indications of the report were already urgent given the current economic situation and are even more so after the elections in the United States,” he said upon his arrival at the summit of EU heads of state and government in Budapest, at which the Twenty-seven want to approve a joint declaration with priorities in the economic field.
The Italian economist predicted that the next US administration led by Trump will “undoubtedly” have relations with the European club different from the current ones, although he added that “they won’t necessarily all be negative”.
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The next president of the United States, he explained, will “certainly” give new impetus to his country’s advanced technological sector, an aspect that forces the EU to “act” because it is already late in this sector in terms of productivity.
Draghi calls for massive investments in the face of the EU’s economic “slow agony”.
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In addition to this “push” to innovative companies, Draghi predicted that Trump will “protect” traditional American industry and recalled that the majority of European exports to the North American partner are part of this sector.
“We must negotiate with the American ally in a spirit of unity to protect our European producers,” he stressed before underlining that “Europe cannot postpone” “important” decisions.
«In all these years important decisions have been postponed because we expected consensus, the consensus did not arrive»he complained, later recalling that this meant “lesser”
Regarding the sources of financing for the huge investments that the EU needs to undertake its economic transformation, the main point of disagreement between the capitals, Draghi defended that it is an “indispensable” but not “urgent” aspect because ” There are many other decisions that can be made” first.
Donald Trump’s “America first” could cost the EU 260 billion euros
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In his opinion, the blockade should focus first of all «fight against the fragmentation of the single market and capital markets» before discussing whether to finance the measures, for example, with an expanded community budget or with new debt issues, two options with public funds that Germany, the Netherlands or the Nordic countries reject.
In any case, the former ECB president believes that public funding will be needed to invest in common European projects, among which he cited energy interconnections. In its report, these needs amounted to an additional 800 billion euros each year.
Time.news Interview: An Insight into EU Economic Strategies with Economist Gabriele Rossi
Time.news Editor: Good day, everyone. Today, we’re diving into the crucial topic of the EU’s economic competitiveness amidst the shifting global landscape, particularly after the recent election in the United States. We have Gabriele Rossi, an esteemed economist and expert on European monetary policy, with us to discuss insights from a recent report authored by former Italian Prime Minister Mario Draghi. Welcome, Gabriele!
Gabriele Rossi: Thank you for having me. It’s a pleasure to be here.
Time.news Editor: Let’s get right to it. Mario Draghi emphasized the need for urgent reforms to tackle the fragmentation of the single market and capital markets. How pressing is this issue for the EU right now?
Gabriele Rossi: It’s extremely pressing. Draghi’s report highlights how the EU’s economic framework is currently disjointed, which hinders competitiveness against global powers, particularly in tech and innovation. With the U.S. under a Trump presidency indicating potential shifts in policy, the EU must address these issues urgently to avoid falling even further behind.
Time.news Editor: He mentioned that the new U.S. administration might bring about a different kind of relationship with Europe. How should the EU prepare for this change?
Gabriele Rossi: Draghi pointed out that while some relationships might change, they won’t necessarily be negative. The EU should focus on unity and communicate clearly with U.S. counterparts, especially regarding shared economic interests. Establishing a collaborative approach would help in protecting European industries while also navigating new U.S. policies.
Time.news Editor: Interesting! He also noted that the EU is “late” in terms of productivity in the tech sector. What steps should the EU take to catch up?
Gabriele Rossi: Massive investments in innovation and technology are paramount. The EU needs to foster an environment that supports startups and established tech firms alike, by increasing funding for R&D. Policies encouraging collaboration between academia and industry can help bridge the gap. Additionally, easing regulatory burdens would enable rapid growth for innovative companies.
Time.news Editor: So, a push for innovation! Draghi also mentioned protecting traditional industries. How should Europe balance traditional sectors with emerging technologies?
Gabriele Rossi: That’s a delicate balance. While it’s essential to invest in new sectors, Europe should not neglect its traditional industries, as they are vital for jobs and exports. A dual approach is necessary: invest in innovation while implementing strategies that support the transformation of traditional sectors into more sustainable ones. For example, helping traditional industries adopt digital technologies could enhance productivity.
Time.news Editor: He urged that Europe cannot postpone important decisions. What specific actions do you think should be taken immediately?
Gabriele Rossi: To respond effectively, I believe the EU should first finalize the joint declaration with economic priorities in Budapest. Following that, enhancing frameworks for cross-border investments and creating stringent timelines for regulatory reforms in capital markets should be addressed, ensuring that the markets serve the real economy and not just financial speculation.
Time.news Editor: Establishing unity and a forward-thinking approach seems vital! Before we wrap up, any final thoughts on the future of the EU’s economic policy in the wake of these developments?
Gabriele Rossi: The next few years will be critical for the EU. The ability to innovate while protecting existing industries will define its economic landscape. If Europe acts decisively now, it has the potential to emerge stronger despite the challenges posed by a changing global environment. Unity and timely action are key!
Time.news Editor: Thank you, Gabriele, for sharing your insights today. It’s clear that the EU is at a crossroads, and your expertise sheds light on the necessary steps forward.
Gabriele Rossi: Thank you for having me. It’s an important conversation, and I’m glad to be part of it.
Time.news Editor: That’s a wrap for today’s interview! Stay tuned for more updates as the EU navigates these critical issues.