Urgent reforms needed: EU lags behind US and China, European Bank reports

An additional 800 billion euros per year in investments are needed by the European Union to undertake rapid and substantial reforms to address its lag behind the United States and China, Azernews reports.

This is detailed in the much-anticipated report on EU competitiveness, prepared by former European Central Bank Governor Mario Draghi at the request of European Commission President Ursula von der Leyen.

The report emphasizes "urgency" and "concreteness" as key themes. It highlights several areas where the EU is falling behind the two largest global economies, particularly in innovation and industrial competition. One notable point is that since 2008, nearly 30% of unicorn companies—those with a market capitalization of 1 billion euros founded in the EU—have relocated, primarily to the United States.

To close the gap, Draghi stresses the importance of accelerating digitalization and transitioning to cleaner energy sources. He calls for the financing of large-scale common projects with European funds, possibly supplemented by international debt markets. Such projects would include breakthrough innovations, common power grids, and defense initiatives, which could also boost productivity across the continent. Draghi notes that a common debt would contribute to completing the EU’s capital market.

When asked about the possibility of a new common European debt, von der Leyen stated that it is crucial first to reach an agreement on shared policies to drive EU progress, and only then discuss the financing mechanisms.