Posted originally on Jul 22, 2026 by Martin Armstrong |  

European Commission President Ursula von der Leyen met with Mario Draghi in Brussels to discuss the EU’s competitiveness agenda and the implementation of Draghi’s 2024 report at Draghi’s request. Whenever these two gather behind closed doors to discuss “competitiveness,” the European taxpayer should grab his wallet because Brussels has never encountered a problem it did not believe could be solved with more centralized power, more borrowing, and more government spending.

The Commission claims that it is making “excellent progress” on trade diversification, regulatory simplification, and a new roadmap called “One Europe, One Single Market.” Paula Pinho, von der Leyen’s chief spokesperson, boasted that the Commission, Council, and Parliament are now committed to following a common timetable for implementing many of Draghi’s recommendations.

“One Europe, One Single Market” is another step toward stripping national governments of economic authority and transferring it to Brussels. They call this harmonization because admitting that it is centralization would alarm the public. European nations are expected to surrender more control over taxation, regulation, capital markets, energy, industry, and public spending to unelected officials who helped create the crisis in the first place.

Mario Draghi’s report correctly diagnosed many of Europe’s illnesses. Productivity is stagnant, energy is too expensive, investment is inadequate, markets are fragmented, and innovation is moving to the United States and Asia. Europe is falling behind in artificial intelligence, semiconductors, defense, digital infrastructure, and advanced manufacturing. Yet Draghi will not admit that the European Union’s own policies produced much of this destruction.

Brussels deliberately increased energy costs through Net Zero mandates, carbon taxes, sanctions, and the abandonment of reliable energy. It suffocated industry beneath environmental rules and compliance requirements. It imposed the Digital Services Act, the Digital Markets Act, ESG mandates, supply-chain directives, and endless reporting obligations. It then looked at the wreckage and concluded that Europe suffers from insufficient government management.

Draghi estimates that Europe requires between €750 billion and €800 billion in additional investment every year through 2030. That is approximately 4.4% to 4.7% of the EU’s annual GDP. The proposed spending includes roughly €300 billion for the energy transition, €150 billion for transportation and charging infrastructure, €150 billion for digital technologies, €50 billion for defense and security, and another €100 billion to €150 billion for innovation.

They are not discussing a modest reform program. They are contemplating an economic transformation costing up to €4.8 trillion over six years. Since private capital refuses to invest sufficient amounts under the conditions Brussels created, Draghi wants government to guide, subsidize, guarantee, and de-risk the investment. In other words, the taxpayer absorbs the losses while politically connected corporations collect the profits.

The European Parliament has estimated that public financing would need to provide approximately €150 billion to €160 billion annually if Europe maintained its traditional 80% private and 20% public investment split. The EU budget cannot provide anything close to that amount. Brussels will therefore demand new “own resources,” expanded EU taxes, financial guarantees, redirected national budgets, or another round of common borrowing.

They always invent a crisis and then use it to push debt that the people never approved. COVID produced NextGenerationEU, which allowed the Commission to borrow hundreds of billions collectively for the first time. What was sold as an exceptional emergency became the blueprint for permanent EU fiscal authority. Those debts must still be repaid, with the repayment burden expected to reach around €30 billion annually beginning in 2028. Now Draghi’s competitiveness agenda provides the excuse for the next debt machine.

Draghi is the same man who promised to do “whatever it takes” to preserve the euro when he headed the European Central Bank. That statement is praised as some act of genius, but it meant that the ECB would suppress bond yields, monetize sovereign risk, and protect the political project regardless of the economic cost. His policies preserved the euro’s institutional structure while encouraging governments to avoid the structural reforms that a genuine market would have forced upon them.

Von der Leyen has operated by the same principle. When her policies fail, she never questions the policy. She demands more authority to enforce it. Europe lost cheap energy, so Brussels proposed massive green subsidies. European companies cannot compete, so Brussels demands a centralized industrial policy. National budgets are drowning in debt, so the Commission wants shared debt. Citizens reject deeper integration, so they rename it “simplification” and “competitiveness.”

The Commission points to trade agreements with Mercosur, India, and Switzerland as proof of progress. Trade diversification is sensible, but no collection of agreements will compensate for making production prohibitively expensive inside Europe. A German chemical company cannot compete because von der Leyen signs another document in Brussels while its energy bill remains multiples of what a competitor pays abroad.

The EU’s competitiveness problem is not a shortage of reports. Draghi produced around 380 recommendations, yet a 2025 European Parliament study found that only 11% had been adopted by September of that year. Brussels now celebrates “steady progress” while European businesses continue to close plants, cut employment, and move investment abroad. These people measure success by the number of directives issued and committees formed, not by whether anyone can still afford to manufacture a product.

Europe does not need €800 billion annually in politically directed investment to repair damage caused by politically directed economics. It needs affordable energy, lower taxes, fewer regulations, protection of property rights, and governments willing to allow capital to allocate itself. Innovation cannot be ordered into existence by Ursula von der Leyen. Entrepreneurs do not need another EU fund administered by bureaucrats who have never created a business or met a payroll.

Their “One Europe, One Single Market” roadmap moves Europe closer to fiscal union without democratic consent. Monetary union was created without debt union or political union, producing the structural crisis embedded in the euro from the beginning. Brussels now intends to use every emergency to construct those missing components through the back door.

The productive citizens of Europe will be ordered to finance it all. They will pay through direct taxation, carbon costs, inflation, reduced pensions, financial repression, and the liabilities attached to common EU debt. German workers are already discovering that the state consumes nearly half the economic value of labor. High earners are looking toward Switzerland, Britain, the United States, and the UAE because the reward for productivity inside the EU continues to shrink.

Von der Leyen and Draghi are not rescuing European competitiveness. They are trying to preserve the centralized political structure that destroyed it. Europe was built by its people and its diverse nations. It is being dismantled by bureaucrats who genuinely believe prosperity can be produced through a timetable agreed upon by three EU institutions over lunch in Brussels. These are not economic architects. They are undertakers discussing how to finance the funeral.