Former Italian Prime Minister and ECB President Mario Draghi said the European Union needs to invest €500 billion a year to remain competitive in the green and digital transition and keep pace with the United States and China. In his remarks to EU finance ministers in Ghent, Draghi stressed that a third of this significant investment need must be financed from national budgets, which requires a concerted effort at EU level to avoid internal funding conflicts between member states, Politico reports.
Stressing the challenges facing the EU, Draghi underlined that the pillars of the bloc’s success are starting to wobble: cheap Russian energy is a thing of the past, lucrative exports to China are suicidal and the US military defence is no longer guaranteed. He stressed the urgent need to combine European investor capital with EU-level resources to meet colossal financial needs, as public resources alone would not be sufficient.
Belgian Prime Minister Alexander De Croo has backed the idea of creating an EU fund to strengthen the industry, particularly in view of the higher energy costs in Europe compared to the US and China. De Croo argued for targeted investment at European level, stressing the importance of industrial clusters for efficient and strategic development.
Concerns were raised about the potential pitfalls of national subsidies and De Croo warned against arbitrary practices that ignore cross-border ecosystems. He called for subsidies to be paid through EU distribution systems and warned against the maintenance of national public incentives that could undermine the interconnected and economically rational blue banana region from the Benelux to northern Italy, where most of the EU’s most successful industrial clusters are located.
