Draghi says EU must spend twice as much as it did after WWII

BRUSSELS ― Europe must invest twice as much as it did rebuilding after World War II, Mario Draghi said, as he published a long-awaited blueprint to stem the continent’s economic decline.

“This is an existential challenge,” the former European Central Bank president said in his 328-page report. The aim is to drag the EU out of a trough of low productivity and feeble growth as it slips behind the U.S. and China.

He said the EU needed an unprecedented level of investment, more than double that linked to the Marshall Plan which channeled $13 billion ― equivalent to about $150 billion today ― to Western Europe in the late 1940s and early 1950s.

Draghi is pushing for the EU to issue new common debt to fund its industrial and defense needs, something that is opposed by several governments. He noted that Europe’s goal to whittle its greenhouse gas emissions down to zero by the middle of the century offer the bloc the chance to build and export clean technologies around the world.

“We should abandon the illusion that only procrastination can preserve consensus,” he said. “Procrastination has only produced slower growth, and it has certainly achieved no more consensus. We have reached the point where, without action, we will have to either compromise our welfare, our environment or our freedom.”

At the core of Europe’s economic woes, the report argues, is the cost of energy for industry, which is currently forced to pay 158 percent more for electricity than in the U.S., and 345 percent more for natural gas.

Draghi sees artificial intelligence as an opportunity for Europe “to redress its failings in innovation and productivity and to restore its manufacturing potential.” He calls for AI to be integrated “into our existing industries so that they can stay at the front.

Samuel Clark, Aoife White, Antoaneta Roussi, Gabriel Gavin and Karl Mathiesen contributed to this article.