The EU: Merely a Spectator? Insights from the Draghi Speech

However, this year, Mario Draghi, former President of the European Central Bank and former Prime Minister of Italy, didn't get the memo delivering a significant address in Rimini, providing an analysis of the challenges currently facing the European Union (EU).

It's by some way the most interesting speech on the current state of the EU for some time.

Events Reshaping the EU's Position

Thus far, 2025 has presented the EU with a number of complex challenges.

Recent developments – including increased tariffs from the United States, the ongoing conflict in Ukraine, heightened tensions in the Middle East, escalating expectations for European NATO members to augment defence expenditure, and the continuing crisis in Gaza – have necessitated largely reactive positions from the EU.

Draghi contends that the longstanding assumption that the EU’s economic scale alone would secure geopolitical influence has been fundamentally challenged by these events.

From Draghi’s perspective, the EU is at risk of being marginalised on the global stage.

Economic indicators reveal that, since the global financial crisis of 2008–2011, the EU has been losing ground to leading economies, particularly the United States, and continues to do so.

In addition, geopolitically, EU member states have, in some notable instances, been excluded from critical international discussions, even when directly affected by the outcomes, for instance the recent Trump/Putin summit in Alaska.

Addressing the Competitiveness Gap

Draghi’s recent comments are consistent with his previous work, including a report delivered approximately a year ago which analysed the EU’s economic competitiveness.

The report outlined several areas requiring immediate reform to close the gap with other advanced economies. The European Commission has acted promptly by transforming a number of these recommendations into actionable plans. These initial measures, currently progressing through the legislative process, take shape in the Omnibus Simplification Package, designed to enhance competitiveness and stimulate investment.

Further initiatives are anticipated, particularly in terms of liberalising the European securitisation market, which currently lags behind its American counterpart in terms of new issuance.

Action and Reform: Key Priorities

Nevertheless, Draghi advocates for broader structural reforms if the EU is to transition from a “spectator – or at best a supporting actor” to a genuinely dynamic economic and geopolitical leader. He identifies two core areas that demand attention:

• Single Market Reform: Internal market barriers, which can equate to tariffs of up to 64% on machinery and 95% on metals, significantly impede productivity. Draghi highlights that reducing these obstacles to match intra-US levels could result in a 7% productivity increase over the next seven years – a substantial improvement relative to current trends.
• Technological Sovereignty: The technological revolution has, to a large extent, bypassed the EU. The region has produced few global technology giants, and Draghi argues that sustained prosperity, wealth generation, and decision-making autonomy increasingly depend on developing critical technologies and securing the raw materials necessary for their production.

Addressing these challenges will require coordinated, substantial investment from all EU member states.

Looking Ahead

The pace of global change underscores the need for timely action.

Reform and recalibration are essential if the EU is to maintain its relevance and fulfil its aspirations as a global power.

Other leading economies – notably the United States, China, India, and Russia – are already shaping the future international landscape. Draghi’s speech, delivered during the European summer holiday period, serves as a timely call for renewed focus and collective ambition.

For further details, the full speech is available here:

“Turn scepticism into action.” Mario Draghi’s speech at the Meeting – Meeting di Rimini

Written by: Aaron Mc Garry