EU Needs €800 Billion Yearly to Meet Competitiveness and Climate Goals, Says Draghi

The European Union requires up to 800 billion euros ($884 billion) in additional investment per year to achieve its key targets for competitiveness and climate, according to a report led by economist and former Italian Prime Minister Mario Draghi. The study emphasizes that the EU's ambitions for greater geopolitical relevance, social equality, and decarbonization are being undermined by lagging economic growth and productivity compared to the U.S. and China.

Draghi's report outlines several critical areas for the EU to focus on, including lowering energy costs, boosting competitiveness, coordinating industrial policy, and increasing defense spending. It also warns that the EU's reliance on external sources for security and critical resources, such as China for key minerals, poses vulnerabilities. The report stresses the need for the EU to build a robust foreign economic policy that aligns trade agreements and investments with resource-rich nations, while enhancing its strategic autonomy in critical sectors.


The study highlights the risks associated with the EU's high trade openness, noting that nearly 40% of the bloc's imports come from a limited number of suppliers that are difficult to replace, with about half originating from nations not strategically aligned with the EU. To mitigate these risks, the report calls for leveraging domestic resources through mining, recycling, and innovation in alternative materials, alongside bolstering stockpiles and forming industrial partnerships to secure key technology supply chains.

Furthermore, the report identifies an "innovation deficit" within the EU, urging reforms to research and development funding and policies to address it. It advocates for a more unified approach to policy and funding across sectors, particularly in clean technology, where fragmented financial support and competition with heavily subsidized U.S. and Chinese manufacturers are challenging EU firms. The report concludes that achieving the EU's goals will require unprecedented investment levels, facilitated by a combination of private finance and public support, alongside comprehensive reforms to enhance the single market and reduce trade barriers.