Two decades ago, an expert report told the European Union that its lackluster growth stemmed from a failure to urgently adapt its economy to an innovation-driven world. Hearing Mario Draghi deliver the same message this week feels depressingly deja vu. Even after a debt crisis and pandemic, amid war at its frontier, the bloc finds asking for advice easier than acting on it. Germany and France’s fractious politics and sputtering economies, along with surging far right, make it hard to see how Draghi’s proposed big bang gets put into practice.
Still, there are reasons to be optimistic, even as Berlin renewed its opposition to joint borrowing in the bloc. The yawning trans-Atlantic productivity divide means pressure to respond isn’t going away. Bloomberg Economics reckons that the EU-US gross domestic product gap could widen to almost 40% by 2050 from about 20% if nothing is done: “Europe desperately needs growth,” Italian central banker Piero Cipollone told Le Monde newspaper last week. European Commission President Ursula von der Leyen has pledged to incorporate Draghi’s findings in her new administration, which aims to deliver a more assertive and competitive Europe.
Source link : https://www.bloomberg.com/opinion/articles/2024-09-10/eu-economy-draghi-takes-aim-at-europe-s-industrial-zombies
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Publish date : 2024-09-09 07:00:00
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