In September 2025 the Draghi report, which laid the foundations for a renewed drive to improve European competitiveness, had its first anniversary. The report identified a productivity gap with the US which, it argued, was “existential” for the European project.1
This productivity gap would only be closed with public and private investment of nearly 5% of European GDP, a strong focus on innovation in critical technologies, a more integrated single market, streamlined regulation, a shift in industrial policy to create ‘European champions’, and a clear focus on energy transition and security to reduce dependency on Russian supplies.
It was a wake-up call: unless Europe’s businesses and policy makers addressed these gaps quickly and forcefully, the European economy would come under increasing pressure from China over capacity and supply chain dominance, and the greater innovative capacity of the US and China; for example Chinese businesses now compete directly with European exporters in 40% of global markets, whereas in 2002 it was just 25%.2 In short, unless Europe completely re-thought its economic model, it could expect its global trade and economic performance to diminish over time.
More than one year on, Mario Draghi, the report’s author and former European Central Bank President, does not rate the progress that the EU has made. In September 2025, speaking at a European Commission conference in Brussels, he argued that Europe has fallen further behind, despite the importance of the challenge.3 The report recommended 885 measures that would improve capital markets, strengthen supply chains and improve regulatory frameworks, but only 11% had been implemented.4 In their September 2025 report, Need for speed – the Draghi report one year on, Deutsche Bank Research analysts Marion Muehlberger and Ursula Walther rated the impact of some 18 of those measures, with 16 rated as “incremental” or “limited” and only two as a substantial reform.5
Given the urgency of the problems faced by Europe, why, then, does there not seem to be any equivalent sense of urgency to trigger the size of the structural and strategic changes that Europe needs?