Mario Draghi presented yesterday in Brussels his ideas for restarting the economy in a Europe which seems to be constantly it slips.

“We will become a society that is essentially shrinking,” said the former head of the European Central Bank, ringing the bell.

Mario Draghi’s outlook for Europe is undeniably bleak. But the worst thing is that although he knows how to improve them, he probably can’t do much, comments Politico in his analysis, and several experts agree with this.

What is clear is that the European Union has a big productivity problem. Its workers produce less per hour than the US, and technology plays a key role in this. Over the past 20 years, America has dominated the digital transition, while Europe has been largely absent.

“The leading companies in research and investment spending are the same as we had 20 years ago,” Draghi said yesterday. “In the United States now everything is digital.”

China on the other hand just can’t keep up. In areas such as the electric vehicle industry, it is leaps and bounds ahead of Europe.

Magic wand

Draghi’s vision for clean energy and high technology it is ambitiouscomments the article. The proposals cover energy market reform, looser merger rules and even changes to the EU’s legislative consultation process.

The European Union, according to the Draghi report, should invest an additional amount 800 billion euros, per year in private and public investment to make it more competitive, an unprecedented jump in spending for a continent that is still uncertain on whether it should try to flush cash or balance its financial books.

So if there was a magic wand with which Draghi could make all of this happen in one fell swoop, then there was no doubt that he would put rocket boosters on the European economy.

But the EU’s legislative process is arduous, slow and held back by a dissenting minority at every turn.

“Germany will not agree”

Nowhere is the problem more difficult than when it comes to talking about money. Draghi wants more public borrowing. Always seen as a big taboo, the EU introduced it in a limited way during the Covid pandemic to help pay for the economic recovery.

But a repeat appears to be blocked by a group of countries such as Germany and the Netherlands, which have low levels of debt and they don’t want to support their more over-indebted neighbors.

The problem is not theoretical. It was less than three hours after Draghi finished his presentation before German Finance Minister Christian Lindner he said that “Germany will not agree” to joint borrowing. And that shows why there are limits to many of Draghi’s ambitions.

Other sources of cash, such as tapping EU funds meant to help less developed European countries catch up, face similar political problems.

Tormented and broken

But there is much good to be said for both Draghi and the report. For those accustomed to the oblique, carefully hedged language that characterizes European Commission bureaucrats, Draghi was direct, even blunt.

A diagnosis is a first step, but it is not a guarantee of finding a cure.

The question is how Europe’s leaders can prevent what seems about to happen. The decline of Epirus is not predetermined. It has come back in the past as well. No one could have expected the economic miracle that followed the two world wars, which saw the size of Western Europe’s per capita Gross Domestic Product (GDP) approach that of the US.

And the sharp shocks of the past two decades, such as the financial crisis and Covid, have finally pushed governments to set aside their local interests and embark on reform. But even surviving a crisis is something.

Slower growth of 1 percentage point is almost imperceptible over a year, but after a decade or two it becomes an unbridgeable gap.