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The scale of the problems facing Europe, though, with Germany giving up hope of achieving any growth this year, mean a lot has to go right. If energy costs are a competitive disadvantage for industry, that’s a separate challenge to needing more R&D spending. Trade policy will also have to play a part in leveling the playing field for domestic industries, with an imminent decision due on China EV tariffs. All these will have to work alongside foreign policy in the race to secure raw materials, as the Centre for European Reform notes. 

Sander Tordoir, Chefökonom der renommierten Denkfabrik Centre for European Reform, sieht in Draghis Schrift etwas Historisches: Sie verbinde Pläne von Jean Monnet (Verteidigungsintegration) und Jacques Delors (Binnenmarkt) mit Bidenomics (Clean Tech plus Resilienz).

Reacting to the report, the Centre for European Reform questioned whether the bloc’s leaders will be willing to implement its findings.It wrote: “Draghi’s report represents a much-needed reality check for the EU’s ambitions. European leaders must address the lack of support for disruptive innovation in Europe and the difficulty entrepreneurs face in commercialising their ideas and scaling up.

“Europe’s innovative capacity is declining, compared with other major advanced economies, as is its business dynamism,” laid out a policy brief from the Centre for European Reform. “Intensifying state-led Chinese competition, geopolitical tensions and continued reliance on imported energy mean that policy procrastination could lead to permanent stagnation, or worse.”

“The question is not whether the UK should follow EU rules,” noted research fellow Aslak Berg in an insight paper for the Centre for European Reform in July, “but rather the extent to which it should do so and whether it makes sense to formally commit to doing so in return for increased market access”. The European Economic Area (EEA), Ukraine and Switzerland all have different models to show how this can be done, Berg explained.

John Springford, a trade economist at the Centre for European Reform think-tank, said that while Du’s results differed from some other academic studies, the findings were in keeping with overall trade data. “Jun Du and her colleagues’ paper fits with what we know in the aggregate data about UK goods trade: exports and imports to all destinations, in both the EU and the rest of the world, have grown more slowly than peer economies,” he said.

“The diagnosis is hard to argue with,” wrote Sander Tordoir, chief economist at the Centre for European Reform, in an excellent thread on X. Tordoir said the plan “channels aspects of the thinking of Jean Monnet (EU defence integration), Jacques Delors (EU single market) and Bidenomics (cleantech/economic security), but above all, Draghi’s own vision.”