Italian banker Mario Draghi delivered his report on the “Future of European Competitiveness” on 9th September.

The document, in two volumes of more than 400 pages, pleads for European integration by the bankers.

Draghi notes the EU’s limited investment (32% of GDP) compared to the United States (142% of GDP) due to the persistence of a traditional pay-as-you-go pension system (except in the Netherlands, Denmark and Sweden). He therefore calls for the development of private pension systems in all Member States in order to raise capital and channel it into the financial markets.

He insists on the need to transform the European Securities and Markets Authority (ESMA) into a truly single regulator, like the Securities and Exchange Commission (SEC) in the United States. “A key step in transforming ESMA is to change its governance and decision-making processes in line with those of the ECB’s Governing Council, detaching them as much as possible from the national interests of EU member states.”

Finally, he calls for a revival of the securitization market in order to increase banks’ financing capacity and calls on the European Commission to propose a revision of the prudential requirements for securitized assets.

In other words, Mario Draghi’s praise for debt runs counter to the prevailing German doctrine.

This impeccably reasoned report makes a compelling point. It screams for urgency, which cuts short any reflection on the methods for responding to it. It sidesteps the question of the causes of the EU’s industrial decline, i.e. its vassalage to the USA, which sabotaged the Nord Stream gas pipeline and organized the war in Ukraine. It takes for granted that the construction of a federal EU is essential if reforms are to succeed, without considering that they could be carried out more easily by cooperation between sovereign states. On this point, it is astonishing in the twenty-first century to promote a top-down structure rather than a network to encourage business. But Mario Draghi is the former vice-president for Europe at Goldman Sachs.

This is the editorial from our paywalled “Voltaire, international newsletter”, n°99. For more information, do not hesitate to subscribe: 500€ per year.