The European Union' s share of global GDP has fallen from 25% in 2000 to less than 15% today. This has caused Europe to lose weight as a global economic player, with a consequent loss of geopolitical power. The report Draghi is committed to giving a boost to European industrial policy in order to bring it back to the economic forefront and to strengthen defense. To this end, he is committed to coordinating digital technological innovation with decarbonization and boosting economic resilience in raw materials and energy.

This report has the virtue of putting on the table the enormous challenges that Europe's Economics faces, as well as presenting a set of recipes for tackling Europe's negative economic dynamics. At the risk of oversimplifying, I would say that a strategic industrial policy for Europe is proposed through two major levers: overturning ineffective regulations and powerful public financing. These are certainly not a priori two mutually exclusive means, but if I had to emphasize one of the two, I would do so on the (de)regulatory vector.

The data report that there is plenty of savings in Europe (especially private savings, specifically 10% more than in the US as a percentage of GDP), but they are often not channeled into productive investment due to the lack of a sufficiently strong entrepreneurial ecosystem. This lack of entrepreneurial dynamism is largely due to all the regulations present in the European Economics , such as the absence of a true single market in many industries. The low use of Next Generation funds in some countries is an example of problems with regulation: many funds often do not end up reaching their destination.

Making industrial policy in Europe is complicated by our heterogeneity, much greater than that of the USA or China. We find ourselves in a status somewhat similar to Rodrik's trilemma: we want democracy, a relevant nation-state and a world-leading European Union. But in reality only two of the three can be achieved. Draghi is recommending a change in governance that translates into transferring more weight from the nation-state to the European Union. Are the actors core topic willing? Some are ( Spain, Italy, France), others are not (Germany, the Netherlands, among others). This discrepancy is transcendental, as it greatly limits the potential for European coordination in industrial policy and for gaining business scale at the global level.

With a few exceptions, such as Airbus in aviation, the most powerful companies in Europe are national: German, French, Italian, Spanish... like the banks. There is not a single truly European bank. They are all national. Think of the European Banking Union. Despite the fact that project has been in place for more than 10 years, the element core topic, the mutualization of risks between countries through European deposit insurance, is not in place. This is because the northern countries think that they will have to finance the bankruptcies of the banks in the south. Let us now look at it from the perspective of report Draghi, and even assuming that abundant funding is obtained. In the face of a new European defense strategy, how will the priorities, organization and territories in which this new industry will develop be established?

In any case, it is to be commended that Europe is serious about boosting innovation. The Economics is about creating wealth and distributing it, and this report is right to focus discussion on the first of the two tasks, something that was missing in Europe. Again, the two dimensions are not mutually exclusive, but the present moment requires rethinking what our future growth model is going to be. The report does not quotation social and cultural issues that I believe also hold back innovation in Europe, such as valuing entrepreneurial work more socially, Education, effort or responsibility staff. These are factors that would undoubtedly improve the entrepreneurial ecosystem and would bring us closer to a more innovative, creative society that is not only focused on rights but also on responsibilities.

European countries do have in common our model of Economics social market. A model that is worth defending, as it includes redistributive mechanisms that put people at the center. This is precisely why it is necessary to empower European companies, to make the system viable. Draghi proposes a roadmap based on industrial policy targeting geo-strategic sectors and also the preservation of our welfare state model . Despite the obvious coordination problems in developing this European industrial policy, it is to be welcomed that we look at ourselves in the mirror with sincerity. And it is the right time to put more emphasis in Europe on supply than on demand. Draghi's change of role is quite a signal: he, who was dedicated to managing aggregate demand through monetary policies at the ECB, now proposes a report that focuses on productivity and innovation, the real sources of long-term growth.