Models for a New Europe Facing Hard Times

Maria Guardiola

While the G7 officially excludes China from Western strategic relationships for the first time, Mario Draghi, who was awarded the Charles V prize in Spain in the presence of Maria Guardiola, the president of the Extremadura Council, revealed the milestones of a European recovery plan.

This strategy is primarily aimed at realigning with American competitive standards. GDP per capita in Europe has decreased since the beginning of the century by a third compared to that of the United States and about 70 percent is explained by lower productivity.

This gap between Europe and the USA is due to the technology sector and digitalisation in general.

Therefore, more public investments are needed in research and innovation, in infrastructure and networks at the centralized European level, as the United States does at the federal level, because they are more “efficient and targeted”.

Thus, the USA remains not only the main partner of the Union but also the reference model.

Draghi has pointed out that due to the current scarcity of public resources, resulting from limited tax jurisdiction at both the national and EU levels in Europe, the private sector is expected to provide a significant amount of investments.

GDP per capita in Europe has decreased since the beginning of the century by a third compared to that of the United States and about 70 percent is explained by lower productivity

However, he also highlighted the potential for the EU area to collect more public resources in the future.

“Private savings will have to be mobilized on an unprecedented scale, well beyond what the banking sector can do”.

Therefore, a greater integration of risk capital markets, stocks, and bonds is needed. This is an activity that involves Enrico Letta.

More, it is necessary to create a market for green sources, capable of differentiating lower costs compared to traditional sources, because energy limits the investment capacity of companies.

To encourage companies to invest and produce more, Europe must not only raise the level of demand, increasing spending, but ensure that it is concentrated within our borders and that it is aggregated at the European level.

Increasing common European spending would be the best way but, in the absence of this, we could “resort to the coordination of public procurement” which would make public spending much more efficient, for example in the military sector. (Redazione)