Draghi warns of ‘greater’ urgency to fix flagging EU economy after Trump election

BUDAPEST — Former European Central Bank chief Mario Draghi stressed to European leaders gathering in Hungary that it was more urgent than ever to overhaul the EU economy and act on the recommendations of his landmark report on competitiveness.

The former Italian prime minister said the “sense of urgency was greater than a week ago” before Donald Trump won the U.S. presidential election.

“Some of [the report’s] suggestions … were urgent even before, because the European economy was stagnating; they are even more urgent today,” Draghi told POLITICO Friday.

On the campaign trail, Trump threatened to slap a universal 10 percent tariff on imported goods. He also threatened to turn off Ukraine aid and to stop supporting NATO countries that do not invest 2 percent of their GDP on defense.

EU leaders were gathering for an informal summit in Budapest for talks on Draghi’s report released in September, which recommends urgently filling an €800 billion-per-year investment gap.

Reeling from the shock of Trump’s victory, Draghi’s recommendations may help to sharpen minds, even though two of the EU’s biggest economies, France and Germany, are embroiled in domestic woes at home.

Asked whether Germany’ collapsing coalition would hamper talks in Budapest, Draghi told POLITICO that the “overall state of European governments is what it is and we have to [adjust] to the times of the politics.”

“It’s not a report that has to be acted on tonight,” he added.

Speaking to reporters, Draghi said the most urgent thing was not to agree on an investment plan Friday but to “prevent the fragmentation of the Single Market and a fragmentation of the capital markets.”

Draghi has warned that the Single Market has been successful but remains highly fragmented, preventing EU companies from scaling up and competing internationally.