Giovanna Melandri’s Post

EU NEEDS RADICAL CHANGE... prelude to upcoming Draghi-report on EU competitiveness: - We have turned inwards, seeing our competitors among ourselves, even in sectors like defence and energy where we have profound common interests. At the same time, we have not looked outwards enough; - In a benign international environment, we trusted the global level playing field and the rules-based international order, expecting that others would do the same. But now the world is changing rapidly and it has caught us by surprise; - Other regions are no longer playing by the rules and are actively devising policies to enhance their competitive position. At best, these policies are designed to re-direct investment towards their own economies at the expense of ours; and at worst, they are designed to make us permanently dependent on them; - China, is aiming to capture and internalise all parts of the supply chain in green and advanced technologies and is securing the access to the required resources. This rapid supply expansion is leading to significant overcapacity in multiple sectors and threatening to undercut our industries; - With our competitors moving fast, we must also assess priorities. Immediate actions are needed in the sectors with the highest exposure to green, digital and security challenges. In my report, we are focusing on ten of these macro-sectors in the European economy. Each sector requires specific reforms and tools. Yet in our analysis there are three emerging common threads for policy interventions: 1. Enabling scale 2. Providing public goods 3. Securing supply of essential resources and inputs

🇱🇺 Following the publication of the Draghi report, serge allegrezza (STATEC) talks to Paperjam about the #competitive situation of a Europe whose productivity has stalled. He sees salvation in the completion of the single market & the ability to issue European bonds. #Luxembourg #economy https://lnkd.in/ePhDFWPT

Can the new EU team save Europe? “dedicated to . . . competitiveness, digitalisation and decarbonisation” and “not preserving the old . . . but embracing the new” is the message today from the German commission president Ursula von der Leyen. France’s nominee Stéphane Séjourné will oversee an industrial strategy with “innovation and investment at its heart”, while Italy’s Raffaele Fitto will be responsible for the multibillion-euro cohesion funds that seek to narrow the gap between rich and poor parts of the EU. The commission presidents next five-year term at the helm of the EU is going to be an interesting challenge, especially on the digitalisation and innovation front and going to drive a lot of new business growth for digital services organisations.

Competitiveness in Europe: a ticking clock for Luxembourg. For data fanatics, the Mario Draghi report about the Future of European Competitiveness is just a confirmation of the data already available. But the tone is truly startling. Just one example: "The regulatory burden on European companies is high and continues to grow, but the EU lacks a common methodology to assess it." It is the first time that I read this in an E.U document. 😬 I strongly recommend you to read it: download it here: Source: European Commission: https://lnkd.in/e54jr6ev Where to start? - "Real disposable income has grown almost twice as much in the US as in the EU since 2000 on a per capita basis". - "To digitalise, decarbonise the economy and increase our defence capacity, the investment share in Europe will have to rise by around 5 percentage points of GDP". - And that is, of course, difficult if you have been spending too much and lost productiveness over the past 20 years. Draghi advocates for 3 priorities: - Closing the innovation gap with the US and China, especially in advanced technologies. - A joint plan for decarbonisation and competitiveness. - Increasing security and reducing dependencies. Long story short: - This report convinced me that there is only one way: heavy investments. (Despite our already high levels of debts in Europe) - This will surely contribute to tensions between members and inside many members' borders. Think "France", "Germany", "Italy", etc. - All of this is NOT A GOOD news for Luxembourg: we thrive on crossborders activities. When our neighbours become selfish, we lose. Funfact: Germany announced yesterday strict controls at its borders. 😬 It is time to reform our economy and prepare it for this new European reality. We are small enough to do it fast, but bold leadership is required to explain the situation to the population and capture new avenues of growth with a focus on high productiveness and strong accountability for each euro invested. Let's make it happen.

Absolutely right. SMEs particularly suffer from overregulation, and somehow the EU must try to wean itself off an ever-increasing pipeline of regulation, and take a hard look at what is really needed to boost productivity and growth, rather than what looked like a good idea at the time. The one-in one-out system turned out to be a misleading exercise, striking out already dead regulation while piling on much more onerous new rules. The Commission has to change its internal reward system to get away from officials winning their spurs through proposing new legislation, and as an institution and individually take seriously the need for better regulation, rather than thwarting stakeholder groups who question a proposal and/or ducking altogether the need for searching impact assessment.

Further ramblings on the #DraghiReport from the latest Eurochambres newsletter: https://bit.ly/ECHNews66 The future of European competitiveness: from theory to practice The much-awaited report by Mario Draghi on Europe’s competitiveness came out on 9 September. The content covers many of the issues that Eurochambres has highlighted during the drafting and as the new EU term takes shape, as our President, Vladimír Dlouhý, commented in his initial reaction. There is no competitiveness silver bullet for Europe, but the Draghi Report shows that we need to build on our strengths such as the single market, our education systems and our research capacity. And that we must take measures to mitigate our weaknesses, including an ageing population and scarcity of key materials and resources. Another challenge highlighted in the report is the EU decision-making process, fittingly perhaps as we all look on while the establishment of the next European Commission is delayed by interinstitutional complications. Mario Draghi’s report to an extent echoes the call of Jean-Claude Juncker at the start of his mandate as European Commission President a decade ago for the EU to be ‘big on the big things and small on the small things’. Mr Draghi calls for focus, emphasising that the EU needs to pool efforts and resources to ensure the critical mass and scale needed to create opportunities for the investment and innovation that will revive competitiveness. At the same time, he cautions against the instinct to over-regulate, burdening businesses with accumulating, overlapping and disproportionate compliance and administrative requirements. Chambers concur with this need to focus on key growth levers, but focus must be backed up with delivery. Many well-intentioned EU strategies – on SMEs, better regulation, industrial policy and the single market to name a few – have flattered to deceive because of a lack of follow-up. The challenge is the same for Mr Draghi’s competitiveness strategy for Europe is the same, but the stakes are even higher. We cannot ignore the incremental and therefore slow nature of EU decision-making, but nor can the EU’s political leaders ignore the stark economic reality that our share of the global economy is diminishing. This requires a sense of urgency across the institutions and of pragmatism, addressing achievable issues that will bring swift results, not least simplification of the regulatory stockpile. Competitiveness must be a top priority for the 2024-2029 EU term and the sheer volume of discussion on the Draghi Report is encouraging. But the focus on competitiveness must be evident not just in reports, social media posts, speeches and conclusions, it must be experienced in the day-to-day activities and results of our business community.

A Competitiveness Strategy for Europe Today, the European Commission has published its report on "The Future of European Competitiveness" (link below), marking a decisive moment for the EU's economic strategy. Led by Mario Draghi, the report outlines the structural shifts Europe must undertake to drive growth, enhance innovation, and strengthen its global positioning in an increasingly competitive landscape. Also today, The Economist published an insightful article that highlights the key takeaways from the EU report (link below). According to the article, Draghi emphasizes the urgent need for Europe to close its innovation gap with the U.S., particularly in the tech sector, which has been a major driver of productivity. The article also highlights the massive investment required for the EU to meet its goals of decarbonisation and digitalisation, with Draghi comparing this effort to a Marshall Plan-scale initiative. Lastly, The Economist underscores the importance of enhancing Europe’s security by reducing dependencies on critical resources and strengthening its industrial capacity, especially in defence. I hope you find it an interesting read! https://lnkd.in/dYCVK3ge

IMF Blog How to Awaken Europe's Private Sector and Boost Economic Growth:  EU companies grow and innovate less than American counterparts [11 September 2024] https://lnkd.in/gPchG6u8 [excerpt] In the European Union, income per person, one of the main gauges of living standards, is on average one-third less than in the United States, mostly because of lower productivity—as emphasized by Mario Draghi’s Sept. 9 competitiveness report for the European Commission. But what is the cause of the problem? As we show in the forthcoming Regional Economic Outlook, Europe's aggregate productivity problem can be traced back to performance differences at the firm level.

Mario Draghi’s recent report on EU competitiveness highlights several key challenges that the European Union is facing: Limited Innovation: The EU is lagging behind global rivals in terms of innovation. High Energy Prices: These are making it difficult for businesses to compete on a global scale. Skills Gaps: There is a significant gap in the skills needed for modern industries. Draghi emphasized the need for rapid and unprecedented reforms to address these issues and improve the EU’s competitiveness.

How are you doing, EU? Have you had a chance to read the Draghi Report on the future of European competitiveness? If not, I highly recommend it!  https://lnkd.in/esA7M_sn The report highlights key areas for action to reignite growth, such as innovation, decarbonization & competitiveness, and increasing security & reducing dependencies. It also offers numerous specific proposals, like the completion of the Capital Markets Union, and outlines the challenges we face. I find myself returning to this report frequently as it provides answers to many questions I encounter while leading a regional business in a large and rather complex organization.  Why are EU economies losing traction to their US or Asian counterparts?  Why do workers in the US accept longer hours compared to those in EU countries?  How crucial is it to achieve consensus and make strategic investment choices? The recommendations may seem straightforward, but the discussions around their feasibility in the EU context definitely raise some interesting points. It's akin to navigating a large organization with multiple stakeholders and competing interests. As a proud European and business professional, I strongly suggest giving the report a read to form your own perspective on the state of the EU.  It’s an enlightening read—kudos to Mr. Draghi! #EuropeanCompetitiveness #BusinessGrowth #Innovation #Decarbonization #EUeconomy #DraghiReport