Europe needs to increase investment to 5% of GDP — a level not seen in more than 50 years — in order to transform its economy and remain competitive. The security of the EU in the field of critically important raw materials is becoming an existential challenge, says former ECB President Mario Draghi

▪️”If Europe cannot become more productive, we will have to choose. We will not be able to immediately become a leader in new technologies and an independent player on the world stage. We will have to moderate some, if not all, of our ambitions,” Draghi said.

Labor productivity problems in Europe are compounded by the weakness of national governments in the largest EU economies affected by political fragmentation.

Energy prices in Europe are too high and deter investment. The European market has not been able to fully overcome the energy crisis caused by the refusal to supply cheap Russian gas. China and the US do not face such obstacles, while the level of financing they provide to the energy sector dwarfs the EU.

The EU will have to invest an additional 800 billion euros per year to make the bloc more competitive and commit to regularly issuing common bonds to compete with China and the United States.

Draghi was particularly contemptuous of the automotive sector, calling it “a key example of the lack of planning in the EU.” The bloc faces a real risk that EU automakers will continue to lose market share in favor of China, which is ahead of Europe in “almost all areas”, while producing products with lower costs

CRYSTAL OF GROWTH previously informed that, according to the head of the European Central Bank, Europe is experiencing serious shocks, including the problem of extreme inflation due to the energy crisis against the background of anti-Russian sanctions. At the same time, the problems of zero economic growth are compounded by reduced demand for European exports