Week 37: Can Green Tech and Mining Save a Fragmenting Union?

Dear all,

Europe. Has always been in trouble. Last two world wars and the third one in the making, we are witnessing right now, are all European business. The old lady or the museum of the past. Regardless how we view it, Europe is hostage of its own inability to act. Divided and united at the same time. Prosperous and poor. Brave and week. The Europe is still in trouble and some of the contrasts are becoming so intensive that future of the fragile union, indeed, looks challenging.

In his long-awaited and somewhat delayed report, Mario Draghi, the renowned former head of the European Central Bank and ex-Italian Prime Minister, presents a thorough analysis of Europe’s productivity challenges and potential solutions. The report, though condensed to 69 pages in its shorter version, offers plenty of insightful ideas. Draghi’s approach is straightforward: rather than focusing on "competitiveness" in a narrow sense—like aiming for export surpluses or cutting wages to lower costs—he emphasizes improving productivity across the board. This is a significant departure from the Eurozone’s past rhetoric, which equated "competitiveness" with reducing labor's share of income.

Among the key policy proposals in Draghi’s report are calls for increased investment and joint funding for common goods, better utilization of the EU’s collective size for acquiring essential resources, and furthering the capital markets union to help companies scale to the continent-wide level. Additionally, he suggests balancing the desire for domestic clean technology with leveraging Chinese capabilities to achieve Europe’s decarbonization goals. However, while Draghi is clear on the “what” of necessary actions, the larger challenge lies in the “how”—specifically, how to implement these ideas effectively. The real innovation of Draghi’s proposals, which has not yet gained enough attention, is his emphasis on reforming how the EU makes decisions. His report advocates for more coordinated and streamlined policymaking, which, if successful, could be transformative for both EU growth and its global influence.