The EU must massively step up spending through joint borrowing to fund investments as it lags dangerously behind the US, a keenly awaited report said yesterday.
European Commission President Ursula von der Leyen last year asked Mario Draghi, a former head of the European Central Bank, to report back on how the 27-country bloc can increase its competiveness amid rising global insecurity and economic challenges.
The report called for additional investment of at least 750 billion to 800 billion euros (US$829.32 billion to US$883.54 billion), almost 5 percent of the EU’s GDP.
Photo: AFP
“For the first time since the Cold War, we must genuinely fear for our self-preservation and the reason for a unified response has never been so compelling,” Draghi told a news conference in Brussels to present his report.
Introducing his blueprint for a “new industrial strategy” based around about 170 proposals, Draghi said “the investment needs that all this entails are massive,” but that “radical change” was needed.
Citing the bloc’s historic COVID-19 recovery fund, the former Italian prime minister said it should issue new “common debt instruments ... to finance joint investment projects that will increase the EU’s competitiveness and security.”
The EU resorted to joint borrowing for 800 billion euros to support member states’ economies hit hard by the pandemic — but the concept remains controversial.
The idea’s biggest supporter is France, but other countries including Germany and the Netherlands oppose such action, fearing they would be forced to contribute more money to make up for southern European countries.
Aware of the difficulties of his proposal, Draghi said common loans would only be possible if “the political and institutional conditions are met.”
Another solution is to better mobilize private capital in the bloc, advocating for progress on the long-stalled push for an EU “capital markets union,” he said.
Von der Leyen in July won a second five-year at the helm of the bloc’s executive arm and hopes to use the report to shape her next mandate.
Europe is entering a new era, confronted by more competition from abroad, but with reduced access to foreign markets as rivals increasingly throw up barriers to free trade, Draghi said in his report.
He pointed to the “wide gap” in economic growth that has “opened up between the EU and the US, driven mainly by a more pronounced slowdown in productivity growth in Europe.”
Draghi’s report pointed to the EU’s weakness in the emerging technologies that will drive future growth — with only four European companies among the world’s top 50 tech firms.
“Europe must become a place where innovation flourishes,” Draghi told reporters, saying the bloc was “punching under our power.”
“We could do much more if all these things were done as if we acted as a community, but we lack focus on key priorities. We don’t combine our resources to generate scale. And we do not coordinate the policies that matter,” he said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS