Draghi takes aim at member states: ‘One year on, every challenge has worsened’

Brussels – One, and only one, word of praise for the President of the European Commission, Ursula von der Leyen, and many criticisms aimed at Europe and its member states. A year after presenting his competitiveness report, Mario Draghi paints a picture of a Europe even further behind than when he left it. “Over the past year, each of these challenges has grown more acute,” is the premise of a long speech that nails national governments to their responsibilities, starting with the much-discussed – in negotiations first and comments later – EU-US trade agreement and the tariffs imposed on twelve-star exports.

“Reliance on the US for defence was quoted as one of the reasons we had to accept a
trade deal largely on American terms,” Draghi scoffs, for an emphasis on conditions suffered that is not accidental: the criticism here is not for von der Leyen, as the European Commission negotiates on behalf of the member states, and the end of July agreement is precisely what the governments wanted,
including the Italian one.

Mario Draghi [Brussels, September 16, 2025]

There are many challenges, including US tariffs, China’s growing influence, the rise of new economies, and geopolitical tensions. In the face of all this, “Europe’s response has fallen into two traps: uncoordinated national efforts, or
blind faith that market forces will build new sectors.” Draghi’s is a scathing criticism of governments more than the European Commission, which he praised for concluding the trade agreement with Mercosur, seen as an asset for Europeans. 

The problem with the European Union, according to Draghi, is that it does not work; everyone goes their own way, and the choices are neither coherent nor strategic. He cites by way of example, the Important Projects of Common European Interest (IPCEI), a coordination tool among the 27 that “can concentrate the support” that economies and businesses need. “Yet in 2023, EU
countries spent nearly €190 billion on state aid—five times more than has been
allocated to IPCEIs since 2018.” A pity and a bad thing, since “used strategically, IPCEIs could help Europe achieve scale in sectors like innovative
nuclear technologies (such as small modular reactors) or in the automotive supply
chain for affordable zero- and low-emission vehicles.” Here, the Commission is taking steps to make such projects more attractive and affordable, Draghi acknowledges. However, “the IPCEI model is still essentially national in design and funding.”

The Europe of nation-states remains stuck in national logic and loses sight of the bigger picture, a criticism Draghi delivers through the voices of those actors who should be at the heart of the European agenda. “Europe’s citizens and companies value the diagnosis, the clear priorities and the action
plans.
But they also express growing frustration,” warns the former ECB president and Italian head of government. “They are disappointed by how slowly the EU moves. They see us failing to match the
speed of change elsewhere. They are ready to act—but fear governments have not
grasped the gravity of the moment.” In the capitals, he adds, “too often, excuses are made for this slowness.”

https://www.eunews.it/en/2025/09/03/nestoras-epic-one-year-after-the-draghi-report-a-sense-of-urgency-is-still-lacking/

This is the crux of a speech that produces the paradox of supporting von der Leyen while also forming an alliance against the EU Council, where good intentions are often lost due to national governments that are confused, divided, and inattentive to the challenges at stake. He cites the electric car market as an example, a classic case where the laxity of governments hinders the European Commission’s commitments and ambitions. “Charging point installation must accelerate three- to
fourfold in the next five years to reach adequate coverage,” he points out. The installation is up to the states, not Brussels. 

Then there is also the privacy regulation, the so-called “GDPR,” which burdens and slows down growth. “Research backs this up,” Draghi said, pointing out that it “has raised the cost of data by about 20 percent for EU firms
compared with US peers.” Even on artificial intelligence we have perhaps gone too far: concerning rules for “high-risk sectors such as critical infrastructure and healthcare,” they must “be proportionate and support innovation and development.” So, according to the former prime minister, “implementation of this stage should be paused until we better understand the
drawbacks. More broadly, enforcement should rest on ex post assessment, judging models by their
real-world capabilities and demonstrated risks.”