On Monday, an Italian technocracy supporter and erstwhile Prime Minister, Mario Draghi, will present a long-awaited study on European competitiveness. The study is intended to supply guidance on how EU countries are to deal with Chinese and American protectionism over the next 5 years.
The study will be published the day before Donald Trump's debate with Kamala Harris scheduled for September 10.
The erstwhile Italian Prime Minister, who took charge in Italy during the 2021 political crisis to save his finances and whose programme was rejected by Italy (in 2022 he resigned), erstwhile rescued the euro as head of the European Central Bank. In fresh months, he has repeatedly commented negatively on American trade policy.
According to Draghi, both China and the US "no longer respect the rules" of global trade. Beijing "risks undermining [European] industries" due to "significant surplus" green technologies (electric vehicles and solar panels). The Americans, on the another hand, have created a threat to European “green” production due to the subsidies offered to investors under the Act on simplification of Inflation (IRA), which results in the outflow of capital from Europe. In addition, the Americans are to destruct their competitors by utilizing "a geopolitical force to change the orientation and safeguard supply chains".
Italy besides did not like the U.S. decision to impose advanced duties on a number of Chinese goods, hitting European producers with a ricochet. He did not so regulation out certain protectionist solutions, any duties to "balance the unfair advantage created by industrial policy". Draghi warned Washington that it does not preclude the real devaluation of abroad exchange rates.
The announcement of the possible devaluation of the euro is simply a informing to Trump, who mentioned the devaluation of the dollar to increase US exports.
Last week, erstwhile Draghi presented his plan to associate States' representatives and Members of the European Parliament, he warned that "the United States has become an economical competitor for the EU". He acknowledged that in today's global economy, "everyone focuses on his own interests". Both Brussels and Washington are aware of this.
Recently Trump proposed to triple the level of duties on Chinese goods and to leave duties ranging from 10 to 20 percent on goods from another countries. The Republican candidate for president expects European countries to adapt to a tough policy towards China.
Harris announced to keep its current economical policy and focus on fresh initiatives raising the requirements for non-financial reporting of the ESG.
Draghi's study is to be published on Monday. ‘Politico’ points out that Mario Draghi was given a much harder task than erstwhile he was head of the ECB. He was instructed to make a strategy that would not leave Europe behind for the remainder of the world. A commission to prepare the report, Draghi received a year ago from the head of the European Commission Ursula von der Leyen.
The Politico findings show that the paper is to be a partial consequence to the structural problems of the EU, from the defence sector to energy. The study deals with the deficiency of investment in innovation. In comparison, the Americans spend around 700 billion euro each year more on this. Europe's possible is not exploited either.
Draghi's paper has more than 400 pages and contains recommendations for 10 major sectors of the economy. The Italian Eurocrat has long reiterated that Europe must invest a "large amount of money in a comparatively short time" to finance economical decarbonisation and digitalisation. He advocated much greater common debt. The ECB estimates that the EU needs an additional EUR 900 billion over the period 2025-2031.
Italian policy believes that much more investment should be made than present in digital technologies and telecommunications. It is suggested that fresh guidelines and prudential rules for banking and investors will appear to facilitate risky investment.
The study is to call not only for increased production, but besides for the request for alleged clean technology with greater added value in the energy field.
The paper will propose a strategy for reducing dependency through trade agreements, especially in terms of natural materials and expanding joint procurement. There is to be much more incentives for mergers, the creation of large corporations. The rules on defence contracts will be relaxed.
The guiding principles on which Draghi was to be based were: social equality, justice and high-quality public services.
More public procurement is to come from Europe. Today, almost 80 percent of public procurement came from outside the EU. Hence, there will be more detailed proposals for "made in Europe" clauses.
A year ago Draghi said in London that the EU needs closer coordination of fiscal policy and improvement of the European Commission's principles of action.
Sources: euractiiv.com / politico.eu
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