Can Belgium navigate Draghi’s radical economic vision?
The EU needs a lot more investment and innovation if it wants to stay competitive, Mario Draghi said on Monday. The former European Central Bank chief’s radical vision poses both opportunities and challenges for Belgium, especially in the context of the ongoing government formation talks and the disagreements on economic policy.
A year ago, EU Commission president Ursula von der Leyen asked former Italian PM Draghi to prepare a report on boosting European competitiveness. His findings are nothing short of a call to action.
The European single market is fragmented, the economy and productivity are growing too slowly, and the bloc is falling behind in crucial fields like technology. If the EU wants to meet its competitiveness targets, a yearly investment of up to 800 billion euros is needed, says Draghi.
His wide-ranging report found that EU priorities must include reducing energy prices, strengthening competitiveness, coordinating industrial policy and raising defence investment. "We can achieve this through more national contributions to the budget or new own resources,” Von der Leyen said after Draghi's speech.
Can Belgium follow?
Draghi’s proposed reforms might put pressure on Belgium and its political landscape. His emphasis on coordinated EU action requires a Belgian government capable of making rapid, cohesive decisions, especially on critical issues like climate, digital transformation, and industrial policy. Belgium’s political landscape, however, is very complex and characterised by a lot of compromising and protracted decision-making.
The ongoing federal government formation talks are illustrative of this. Regional disparities, and especially different economic priorities, make for heated political discussions but often stand in the way of efficient and proactive governing.
"We can achieve this through more national contributions to the budget or new own resources"
Many Flemish parties, for example, may want to push for policies that favour high-tech sectors, while Wallonia, with its stronger reliance on traditional industries, might want to demand stronger protections for local jobs.
Draghi’s radical vision might also reignite debates between fiscally conservative parties and those more open to EU borrowing. Belgium, which has one of the worst budgets in the EU, is already facing serious budget cuts. If the country has to contribute to the proposed 800 billion euros in annual EU investments, serious debates are to be expected.
Radical reforms
Belgium could, however, also benefit from Draghi’s radical economic reforms. Key sectors like biotechnology, pharmaceuticals and digital technologies, where Belgium has a competitive advantage, will continue to grow, and a unified European energy market could benefit the country by reducing energy costs and enhancing resilience.
It remains to be seen how this report will shape EU economic policy. But if Belgium wants to share in the gains, it will likely have to commit to a more efficient, economically sane, and proactive government.
Mario Draghi and Ursula von der Leyen in Brussels © PHOTO NICOLAS TUCAT / AFP
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