"For the first time in human memory, we are alone," says Mario Draghi. Or rather, "we are alone together." Europe lives in a new reality. Without its key allies, primarily America. Above all, Europe in this new world "responds within a system that was never designed for challenges of such scale." That is why, says Draghi, the decisions Europe must take "can no longer be confined within the institutional framework we have inherited." It would not work. For him, the answer lies in a powerful change, in courage, and in what he calls "pragmatic federalism."
Draghi came to say this in a speech that is perhaps his clearest and most concise to date, in Aachen, Germany, in the country that was deeply suspicious of him, almost to the point of making him a public enemy ("How can an Italian defend currency stability?" German politicians used to say, and newspapers sometimes described him as Count Dracula). On the contrary, this morning Draghi received the Karlspreis, the Charlemagne Prize, the highest German award, for "life's work." In the chapel where, after Charlemagne, about thirty German emperors had been crowned, "Dr. Professor Mario Draghi" was awarded the medal, the certificate, and the prize of 1 million euros (to support European projects). In the front row was Chancellor Friedrich Merz, who introduced him and thanked him.
Draghi begins by improvising in English: "I have never had so many people to thank," and like an Oscars ceremony, he mentions many, but "thanks above all my wife." Mrs. Serena appears surprised, reacting almost as if Draghi were joking with her and resists (she "scolds" him a little, like wives who do not want to follow their husbands publicly), before standing up and accepting the applause. Then Draghi begins his lesson. A scholarly speech, which does not hold back in criticism (not even implicitly) toward the status quo.
America and China
Draghi says that the context has changed completely. "The world that once helped Europe create prosperity no longer exists. It has become harder, more fragmented, and more mercantilist." He is categorical about America, which has been his primary orientation all his life. "From the other side of the Atlantic, we can no longer take for granted that the custodians of the post-war order will remain committed to its preservation. Decisions with deep consequences for European economies are made increasingly unilaterally, without respect for the rules that the United States once defended. And for the first time since 1949, Europeans must face the possibility that the United States may no longer guarantee our security on the terms we took for granted."
He calls for a more decisive stance toward Trump, without naming him. "For now, Europe needs the ability to respond more dynamically, so as to bring the relationship back to fairer foundations." And further: "Europe has sought negotiation and compromise. In most cases, it did not work." But he is also very critical toward Beijing. "Neither does China offer an alternative anchor. It creates industrial surpluses on a scale that the world cannot absorb without emptying our own productive base. And it directly supports our adversary, Russia."
How we got here
If Europe finds itself in this situation, it is not a coincidence. The fact is that it was designed exactly this way. "The European project was built, deliberately and wisely," says Draghi, "to prevent the concentration of power. After the catastrophes of the first half of the twentieth century, Europeans decided that no member state would dominate the others." Independent authorities, rule-bound processes and markets, agreements between governments were wrapped "in layers of procedures that eliminated their political character." Deliberately. The results of that system, says Draghi, were impressive: peace. the single market. the euro. freedom of movement. "It allowed us to achieve something historically rare: integration without subordination." Until it stopped working.
Why it doesn't work
Draghi says that the European system was based on two assumptions. The first: "That Europe had built a truly open economy, in which the state did not need to direct growth." The second: "That Europe would never again need to face the harshest issues of power and security, because others would answer for us." But the fact is that "both these assumptions have now proven empty."
Then the more political Draghi emerges: "There is an irony in all this. Europe relied on markets to perform a task that the common political authority had not been authorized to perform. But we deprived these markets of the continental scale they needed to succeed." Draghi believes that many of today's solutions, such as concluding international economic agreements, are a patch: they help but do not solve the real problem — a message that the Germans and Merz must heed. "These tools will not produce what their supporters hope for, unless Europe also resolves the inconsistency at the core of its economic model."
3 vulnerabilities, 5 ideas
Draghi identifies three major vulnerabilities for Europe:
1) Dependence on external demand. "European businesses sought growth outside Europe, because the internal market was not integrated and dynamic enough."
2) Strategic dependencies (including American LNG).
3) Technological lag, particularly in AI. "It is perhaps the vulnerability he considers most serious," says Draghi. "Europe is losing ground against the USA and China in the critical technologies of the next decade."
He then moved on to proposals: integration of the single market, an industrial policy ("If the member states of Europe attempt a large-scale industrial policy within the existing structure of the single market, they will fail. They will spend inefficiently, fragment investments along national lines, and impose costs on one another"). He then made extensive reference to the need for European defense and strategic autonomy. And here there is also a message to the sovereigns/Eurosceptics: "Even the parties that built their identity on national sovereignty now recognize that no European country can defend itself alone."
Pragmatic federalism
Finally, Draghi spoke about two ideas that are particularly important. His "pragmatic federalism": for Draghi, the Europe of the "27" often fails to decide, because everything fails through procedures and compromises. The solutions vary: among them "allowing countries that want to move forward to do so," but also "creating specific collaborations" that give visible results, building consensus in society. And there is a need above all for "greater political decision-making capacity." Today's institutional structures are no longer sufficient, Europe must put "substance before procedure."
In short, courage is needed, which, for Draghi, the citizens themselves want and demand. Decisions must be made: "Some require a scale that only Europe can provide. Others require a degree of democratic legitimacy that must be built from the ground up." That is, democratically. The professor concluded: Between the lines, there was no lack of criticism toward the very people in the room (including Ursula von der Leyen) who heard him. But everyone stood up. Then a guitar quartet played "Ti voglio bene assaje."
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