Why Can't Europe Be More Like America?

This was the question running through Mario Draghi's uncompromising report into the EU's lost competitiveness. But rather than embrace a Hamiltonian moment, Europe risks reverting to historical type

Photo by Ryan Quintal on Unsplash

I wrote last week about my gloominess over the outlook for Europe. It turns out I am not alone. Judging by his report into the competitiveness of the European Union published this week, Mario Draghi is even gloomier. The former Italian prime minster and European Central Bank president laid bare over more than 400 pages in excruciating detail the extent to which the EU is falling so far behind America and China in innovation, productivity, investment, skills and defence.

Of course, much of his critique of the EU economy is familiar. This was not just the second report into the EU’s lost competitiveness by a former Italian prime minister this year, but the third in the past decade following reports by Enrico Letta published in June and by Mario Monti in 2016. But what gave Draghi’s report extra force was both who said it - the 78 year-old who saved the euro with his whatever it takes speech is a political giant in Europe - and the clarity with which he said it.

Running through Draghi’s report is a simple question: why can’t Europe be more like America? In sector after sector, he compares Europe to America and finds it consistently falling behind. And he warns that only by becoming more like America can the EU have any chance of reviving its competitiveness, innovation, productivity, resilience and security. The alternative is an EU that has lost its reason for being. But while it is hard to argue with his analysis, what are the chances of it happening?