Draghi: “We need more innovation. Yes to tariffs, as long as they are constantly assessed”

Brussels – Yes to tariffs, as long as they are imposed where  needed and not too lightly, because otherwise we risk producing the effect contrary to the European interest. But above all, more growth and policies that serve the purpose. Mario Draghi tries to lash out at Europe with a programmatic speech for the future of the twelve-star economy addressed to those who will be called upon to make the appropriate choices. The rapporteur in charge of the competitiveness report has already had the opportunity to say that a momentous breakthrough is needed, and he reiterates this once again with his speech to the European Carlo V Award.

We need an industrial policy that aims to “increase productivity,” Draghi explains warning that “The pipeline from fundamental research into commercialisation of ideas is also much weaker. There are no European innovation clusters in the top 10 globally, and our universities struggle to retain top talent.” As a result, “the EU must treat research and innovation as a collective priority.” Otherwise, it will continue to fall behind. “As a share of GDP, European firms spend about half as much as their US peers on research and innovation, leading to an investment gap of around €270 billion a year,” Draghi noted.

And then there is excessive legislation: the “successive layers of regulation have created a burden on long-term investment, as reported by 61% of the European Union companies last year.” All this is holding back Europe and its competitiveness. Therefore, “we need to re-think the innovation environment in Europe.” 

This is Draghi’s key message. The priority cannot be tariffs on imported products, which could help safeguard the EU. “We don’t want to become protectionist in Europe, but we cannot be passive if the actions of others are threatening our prosperity,” Draghi stressed. He also emphasized the difference between unfair competition and more advanced products that Europe does not have and needs. “The use of tariffs and subsidies should be principle-based and consistent with maximizing our productivity growth,” he said. “That means distinguishing genuine innovation and productivity improvements abroad from unfair competition and demand suppression.”