Mario Draghi Sounds the Alarm – Can the EU Operate in Time?
As we return from the summer break, we begin this new European Union mandate with a sharp sense of urgency. Mario Draghi’s report on European competitiveness has sounded the alarm – the EU’s economic health is deteriorating, and immediate intervention is needed to prevent a ‘slow agony.’
Indeed, the EU suffers from a range of critical conditions – challenges which the newly-announced College of Commissioners-elect, will need to speak to in the Hearings to come. A fragmented Single Market is restricting growth, international competition weakens key industries, and decarbonisation efforts are lagging, as highlighted by the European Climate Neutrality Observatory. These issues demand a swift response.
In our latest study, we zoom in on the EU’s green industrial policy and cleantech sector and explore how the EU already possesses many of the instruments necessary to operate – but hesitation or delays could result in lasting damage. A green industrial policy has the potential to address both climate and competitiveness concerns. However, past initiatives, such as the Net Zero Industry Act and the Strategic Technologies for Europe Platform, raise doubts about whether the EU is fully equipped for a procedure of this scale. The next step? A Clean Industrial Deal. While the details are still being formed, there’s concern that it may offer piecemeal solutions instead of a comprehensive treatment. To succeed, this Deal must be a decisive operation, not a collection of uncoordinated sticking plasters.
For the Clean Industrial Deal to succeed, the EU must focus on effective governance and streamlined regulations. Rather than creating new bodies, existing frameworks like the Clean Industrial Dialogues should be expanded, with transparency in implementing recommendations. Proven tools, such as the European Industrial Alliances, can identify bottlenecks and guide funding. At the same time, advancing the Capital Markets Union and harmonising Single Market standards will help cleantech companies scale and compete, ensuring Europe’s industrial competitiveness. The real key to success lies in addressing the Climate Investment Deficit. The EU’s response requires immediate capital injections. A Cleantech Investment Plan, drawing from the Innovation Fund, the European Investment Bank, and unspent Recovery Funds, could ensure that treatment begins today rather than waiting for the next EU budget cycle.
Draghi’s warning is clear: business as usual won’t suffice. The EU already has the tools to perform the necessary operation – but they must be used with precision and urgency.
