(Bloomberg) — The European Union needs to find a way to quickly raise major investments to keep up with major changes in the world order. mario draghi.
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“Many significant changes have occurred in the global economic order over the past few years,” he said on Saturday. “These changes have a variety of implications, but one is clear: we will have to make huge investments in Europe in a relatively short period of time.”
The former president of the European Central Bank has been tasked with writing a report on how to make the EU more competitive. He spoke in Ghent, Belgium, where he was meeting with regional finance ministers and others as attention focused on the second anniversary of Russia's invasion of Ukraine.
The war has put defense spending at the top of Draghi's agenda as he consults member states on ways to boost regional economies in an increasingly hostile global environment.
“I look forward to this discussion to find out what the Treasurer is thinking and preparing for how to fund these investment needs,” he said. This includes ways to leverage personal savings to a greater extent than before, he added.
One idea being considered at the two-day meeting is joint EU borrowing to pay for the region's military buildup, following a similar move during the coronavirus pandemic.
EU Economic Commissioner Paolo Gentiloni told reporters that the experience showed that using common debt was a “sound way” to deal with the crisis.
“There is no reason why we should not continue to provide common funding for common goals,” he said.
Draghi, a former Italian prime minister, is expected to submit his findings after the European Parliament elections in June.
The eurozone faces huge spending needs, including on climate change and the digital transition, but the Ukraine war and the prospect of Donald Trump returning to the White House have focused talks on how to strengthen European security. It is being
European Commission Vice-President Valdis Dombrovskis said: “It is clear that the EU needs to pay more attention to its defense capabilities and the capabilities of its defense industry, and we need to work together.”
He added that member states need to make further investments, especially given that many countries have not met the NATO goal of spending at least 2% of GDP on defence.
“And certainly there will need to be a discussion about what EU-level instruments we can have,” he said.
–With assistance from Sanne Wass and Kamil Kowalcze.
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