From trade tariffs to the race for artificial intelligence, from the cost of energy to common defence: Mario Draghi’s speech at the European Parliament Week 2025 in Brussels left no room for interpretation. If the Union wants to preserve its competitiveness, it must act as one. Not a wish, but a strategic necessity.

“To meet these challenges, we have to behave more and more as one. The complexity of the policy response requires an unprecedented level of coordination between governments, the Commission, the European Parliament and national parliaments,” the former ECB president told MEPs.

Geopolitics and the risk of marginalisation

The premise is clear: Europe is moving in an increasingly polarised global context. The former Italian prime minister expressed concern over the tariff squeeze imposed by the United States on China, fearing a double side effect for European companies: restrictions on exports to the American market and a wave of Chinese overproduction directed at Europe. The risk is a further blow to continental manufacturing, already penalised by higher energy costs compared to other advanced economies.

“Large European companies fear the influx of Chinese goods more than the loss of access to the US market,” warned the former Eurotower tenant, emphasising the danger of deregulatory and fiscal policies in the US attracting industries. Meanwhile, Europe may find itself alone in ensuring Ukraine’s security.

Energy: a knot to be untied as a matter of urgency

Unstable energy prices are a burden on European growth. Draghi warned against the volatility of natural gas, with increases of 40 per cent since September, and an energy cost differential between Europe and the United States that penalises the competitiveness of continental industry.

“Lowering energy prices is now a necessity not only for traditional industries, but also for advanced technologies,” he emphasised. The exponential increase in energy consumption in data centres and digital applications makes it imperative to reform the energy market, with greater transparency in supply contracts and massive investment in renewables. However, he warned, the green transition cannot overburden households and businesses.

Europe and the artificial intelligence train

The EU’s technological backwardness is increasingly evident. Draghi mentioned how the US dominates the creation of artificial intelligence systems, with China catching up fast. Europe, on the other hand, remains a marginal observer.

“Eight of the top ten AI models are American, the other two Chinese. Every day of delay moves the technological frontier away from us,’ he warned. However, he pointed to a window of opportunity: lower AI development costs could accelerate a European catch-up, provided the EU moves decisively on investment and regulation.

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An internal market suffocated by barriers

Innovation struggles to thrive in Europe, hampered by a fragmented internal market. Draghi emphasised the urgency of removing the regulatory obstacles that drive many companies to relocate elsewhere.

“We have a domestic market the size of the US, but our barriers amount to a 45% tariff for production and 110% for services,” he complained. The solution? Harmonised rules, a more dynamic capital market and incentives for venture capital to foster economies of scale and attract investment. “A two per cent increase in productivity over ten years would reduce fiscal costs for governments by a third,” he added, emphasising the link between structural reforms and financial sustainability.

Common defence: the need for a breakthrough

On the security front, the former Italian Prime Minister insisted on the fragility of the current European model. Defence remains largely a national issue, but geopolitical tensions call for a radical overhaul. If the US were to further reduce its military commitment on the continent, the EU could no longer afford to postpone a common strategy.

The Commission’s ‘Compass for Competitiveness‘ is a step in the right direction, but it is not enough. Draghi estimated that EUR 750-800 billion per year is needed to adequately finance strategic sectors. However, he warned, the Commission cannot act alone. “The European Parliament, national parliaments and governments must work alongside it, ensuring resources and speed of action,” he said.

Speed is essential

Mario Draghi’s final message was peremptory: Europe can no longer afford sluggishness. Global growth is accelerating, rival economies are restructuring, and markets are transforming rapidly. If the Union does not want to fall behind, it must act now.

“Speed, scale and intensity will be decisive,” he reiterated, urging an integrated approach on industrial policy, trade, innovation and research. Only coordinated action between governments and institutions can prevent Europe from sliding into prolonged stagnation.

The former premier outlined a clear direction: streamlining decision-making processes, mobilising resources, breaking down internal barriers and defending strategic sectors with an open approach to innovation. What is at stake is not only economic competitiveness, but the very future of the Union in a world increasingly dominated by great powers. Europe still has time to act, but the window of opportunity is rapidly closing.