The European Union today faces "an existential challenge" and if it doesn't change, it will be condemned to "a slow agony." Mario Draghi, ex-president of the European Central Bank (ECB), sounded the alarm on Monday, September 9, as he made public a report on competitiveness commissioned by the European Commission a year ago. A few days earlier, in a meeting with the presidents of the European Parliament's political groups on September 4, the former Italian prime minister had even confessed to having "nightmares" when he imagines what awaits the 27 member states if nothing is done.

The facts are clear: The European economy has fallen behind the United States, while China is inexorably catching up.

"Real disposable income per capita has grown almost twice as much in the US as in Europe since 2000," Draghi wrote in the report. And, as things stand, there's no reason for this downward slide to stop.

Admittedly, the aging of the population – by 2040, the population is set to lose 2 million working people a year – goes some way to masking the effects. "We share this cake which becomes smaller and smaller – with a smaller number of people," explained Draghi. The challenges facing the Union in decarbonizing its economy, turning the corner on artificial intelligence or reducing dependencies in an increasingly unstable geopolitical context require it to act quickly.

Otherwise, Europeans will no longer have enough "cake" to support their model. "If Europe cannot become more productive, we will be forced to choose. We will not be able to become, at once, a leader in new technologies, a beacon of climate responsibility and an independent player on the world stage. We will not be able to finance our social model. We will have to scale back some, if not all, of our ambitions," wrote Draghi.

Throughout the 400 pages of his report, Draghi dissects the reasons for Europe's stalling and sets out his 170 proposals for changing the situation. It is imperative, he believes, that Europeans develop a skilled workforce, invest in research, complete the construction of an internal market which remains unfinished, lower electricity bills for citizens and businesses alike (two or three times higher than in the US), and seriously tackle the de-bureaucratization of their economy.

If they are to succeed, the 27 member states will also have to review their competition rules, which sometimes prevent the emergence of European success stories, and ensure greater consistency between trade, environmental and climate policies. Above all, the Union needs to invest massively in clean technologies and digital technology, while reducing its dependence, particularly on China. At a time of war in Ukraine, it must also provide itself with the means to finance a defense industry capable of offsetting the announced disengagement of the US, whether or not Donald Trump returns to the White House after the November elections.

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