The conclusions of the reports commissioned by the European Union on the single market and competitiveness are beginning to emerge and are anything but reassuring.

“The world is changing rapidly and it has taken us by surprise”, warned the former President of the European Central Bank (ECB) and former Prime Minister of Italy, Mario Draghi, to the European leaders gathered in Brussels. The EU’s response to these changes “has been limited because our organization, our decision-making process and our funding is designed for yesterday’s world. The world before covid, Ukraine, the outbreak in the Middle East and the return to the great rivalry between powers”, said the Italian when a few hours were left before the start of the first European summit in years focused on in competitiveness.

“We need an EU at the level of the world of today and tomorrow, and what I propose in the report that the President of the Commission entrusted to me is a radical change, it is what is needed”, said Draghi, one of the most respected voices on the European scene – and whose name is ringing again to preside over the next Commission -, during a conference held on Wednesday in La Hulpe (Belgium). The Draghi report was commissioned by Ursula von der Leyen and will be published after the European elections.

What has already been made public is the one ordered by the European Council to the former Italian prime minister and president of the Jacques Delors Institute, Enrico Letta. And although its scope is more restricted, the single market, it includes a similar diagnosis of the ills that afflict Europe and how to solve them.

His proposals basically involve a leap forward in European integration to the level of what was done more than thirty years ago with the aim of overcoming the current dispersion, which prevents companies from growing and exploiting the market’s potential single (“very fragmented in reality”, Letta underlines), develop an industrial policy and the union of capital markets to prevent the savings of Europeans from being diverted to the United States and, in some cases, used to finance the purchase of European companies. “We are facing the last chance”, warned Letta yesterday, who will present his report to the European Council today.

In his speech at La Hulpe, Draghi fired from the first minute. The European Union was miscalculated in the years following the sovereign debt crisis, he said in a clear allusion to the policy pushed by Berlin: “We deliberately embarked on a strategy of lowering labor costs relative to neighboring European countries”, “and we thus weakened our domestic demand and our social model”, he said. Instead of trying to compete with the world, “we became our own competitors”.

Meanwhile, other global players have stopped respecting international rules with protectionist policies such as those adopted by the United States to “attract manufacturing capacities to the territory, including European companies”, further harmed by the high costs of energy and ‘excess regulation, and the EU has not reacted. “Without coordinated strategic political actions at the European level, some energy-intensive industries will have to leave Europe or close down”, stressed Draghi, who sees it as urgent to design a true European industrial policy to transform the economy and leave behind the current dependencies.

But not all the money that the EU has to invest can come from public funds, point out the two Italian politicians. What would really change everything would be the union of the European capital markets. Draghi proposes that, if it is not possible to move forward all at once, a group of countries that are determined to Europeanize their financial supervision or insolvency laws should move forward first. These changes, they agree, are key to enabling large European companies to grow and be able to compete with those in the US or China, and to drive the creation of European champions in key sectors such as telecommunications.