Draghi Urges EU to Form Federation to Prevent Deindustrialisation and Decline
Former Italian Prime Minister and President of the European Central Bank, Mario Draghi, recently addressed crucial issues facing Europe. Speaking at the Belgian Ku Leuven University, he argued that Europe must evolve from a confederation to a genuine federation. Without this change, he warned, Europe risks becoming “subordinated, divided, and deindustrialised.”
Calls for European Federation
During his speech, Draghi emphasized the necessity of a streamlined, collective approach to power in Europe. He asserted that the current global order is “now defunct,” particularly highlighting the negative effects of China’s entry into the World Trade Organization. This shift has led to significant political backlash and created a world characterized by reduced trade and weakened regulations.
Challenges from Global Powers
Draghi pointed to several critical challenges facing the EU:
- The United States is imposing tariffs on Europe.
- China controls vital segments of global supply chains.
He noted that the U.S. seems to favor European fragmentation, viewing it as advantageous to their interests. Meanwhile, China is strategically using its influence to manipulate markets, which poses additional risks to Europe’s economic stability.
The Call for Pragmatic Federalism
In light of these challenges, Draghi proposed what he referred to as “pragmatic federalism.” He argued that without deeper integration, Europe will remain vulnerable, comparing it to a “loose assembly of middle-sized states.” This approach would strengthen Europe in areas such as:
- Trade
- Competition
- Monetary policy
According to Draghi, in sectors where Europe is federated, it is regarded as a significant player. He cited recent successful trade agreements with countries like India and nations in Latin America as examples of the EU’s negotiating power when united.
Independence and Values
Draghi’s vision for the EU emphasizes a voluntary approach where member states can opt into greater unity. This proposal aims to maintain respect for individual nations while fostering a cohesive European power. He stated, “We do not have to sacrifice our values to achieve power.”
The euro was highlighted as an example of successful gradual integration. Draghi urged Europeans to consider whether they want to remain a fragmented market or take decisive steps to unify as a genuine power capable of defending its interests.
Ultimately, he warned that a Europe unable to uphold its interests may jeopardize its core values over time. The urgency for action is clear if Europe wishes to avoid deindustrialisation and decline.
