Mario Draghi's Report on EU Competitiveness: One Year On – Developments and Perspectives
One year after the release of Mario Draghi's seminal report on "The Future of European Competitiveness" in September 2024, the European Union finds itself at a crossroads. Commissioned by European Commission President Ursula von der Leyen, the 383-page document outlined an "existential challenge" for Europe, warning of sluggish growth, technological lag behind the U.S. and China, and the need for radical reforms.
Draghi proposed €800 billion in annual investments—equivalent to 4-5% of EU GDP—to unify capital markets, streamline regulations, and accelerate innovation in AI, green tech, and defense. This would involve completing the Capital Markets Union (CMU), boosting research and innovation (R&I) spending to €750-800 billion yearly, and fostering a "28th Regime" for harmonized rules to support startups.
As of September 2025, progress remains uneven, with only about 11% of recommendations implemented, amid geopolitical distractions like U.S. trade tensions and the Ukraine war. This essay examines the latest developments, spotlighting the European Parliament's recent resolution, and incorporates insights from EU figures and leading technologists, highlighting the report's enduring relevance for Europe's fintech and broader economic landscape.
Latest Developments: Stalled Progress and Renewed Calls for Action
The Draghi report's anniversary has prompted introspection across EU institutions. A year on, analyses reveal limited headway. Deutsche Bank's September 2025 assessment notes that while NATO data show an EU defense spending shortfall of $226 billion for 2025 against a 3.5% GDP target, broader competitiveness reforms lag. Politico's recent scorecard rates EU efforts modestly, praising alignment on clean industrial deals but criticizing inaction on farm spending reallocations to strategic priorities like AI and energy. Draghi himself expressed frustration in recent statements, urging leaders to "do what I told you," amid fears Europe risks irrelevance.
Key sectors remain unaddressed: Energy, defense, pharmaceuticals, and automotive show zero progress on recommendations, per Italian outlet Greenreport, while critical raw materials see some advancement. The Financial Times highlights von der Leyen's preoccupation with averting U.S. trade wars under the Trump administration, delaying CMU and single market completions. However, positive strides include the European Research Council's July 2025 report aligning industry, policy, and science voices on R&I-driven competitiveness.
“Europe stands at a critical juncture where – beyond simply enhancing competitiveness –research and innovation are vital in ensuring the continent’s prosperity and stability. The challenges are significant – market fragmentation, risk aversion, funding gaps, data silos, and cultural mindsets – but the workshop identified clear paths forward.”
- Research & Innovation for a Competitive Europe From Analysis to Action Workshop report
In fintech, the report's push for unified markets resonates amid €5.2 billion raised in H1 2025, but fragmented regulations hinder scaling. Draghi's emphasis on digital sovereignty, reducing reliance on U.S. tech, aligns with ongoing AI Act implementations, potentially unlocking billions in efficiency for cross-border services.
The Most Recent Press Release: European Parliament's Resolution
The European Parliament's press release on September 8, 2025, marks a pivotal development, signaling renewed momentum. Titled "MEPs Keep Up Momentum for Draghi Report," it details a plenary session where MEPs debated on Monday and voted on Wednesday, adopting a resolution with 407 votes in favor, 161 against, and 97 abstentions. The text builds directly on Draghi's warnings, stressing that without action, Europe risks geopolitical irrelevance and economic decline. It links competitiveness to the rule of law and sustainable growth.
“MEPs call for concrete measures to make financing more available and affordable, especially for SMEs and innovative ventures. To do this they want, among other things, larger venture capital and growth funds, financed in part through transforming personal savings into investments. This should be coupled with an EU strategy for financial literacy, MEPs say.”
Key proposals include mobilizing private investment through larger venture capital funds, transforming personal savings into productive assets, and an EU-wide financial literacy strategy. MEPs demanded rapid completion of the banking union, CMU, and a new Savings and Investments Union, alongside a pan-EU equity listing environment to retain startups. Corporate taxation reforms and joint EU bond issuance for public investment address funding gaps in crises. The resolution urges the Commission to present concrete financing proposals, emphasizing complementarity between public and private sectors.
Rapporteur Aurore Lalucq (S&D, France) stated post-vote:
"A year ago, the Draghi report painted a bleak picture of our continent’s economic situation. The European Parliament has chosen to respond with this report, which sets out a path towards greater financial independence for the European Union in order to halt its economic and political decline. It is now up to the Member States to build on the momentum initiated by Parliament by turning these recommendations, such as joint supervision or support for sustainable investment, into concrete action."
This non-binding resolution pressures member states and the Commission, aligning with von der Leyen's upcoming State of the Union address on September 11, 2025.
Perspective From the EU
EU leaders have broadly endorsed the report as a blueprint, though implementation critiques abound. French Renew Europe Minister Stéphane Séjourné declared that the Draghi report has become the economic doctrine of the EU, and everything proposed since has been aligned with it. Von der Leyen, who commissioned it, faces scrutiny for delays, with diplomats noting the competitiveness agenda is "blocked" by national leaders.
EPP Group leader Manfred Weber highlighted job losses:
"Europe lost ~90,000 car industry jobs last year—90,000 families affected. We support an ambitious climate policy but we need a realistic, technology-neutral approach, combustion engines, nuclear energy, laws that work. More Single Market, flagship projects, investments, digital!"
The S&D Group, via Lalucq, urged stopping "dragging feet" on massive investments and capital market integration. Renew Europe called for a "true EU defense," Draghi implementation as 2026's priority, including the 28th Regime and CMU, plus ending unanimity for faster decisions.
“When we talk about productivity or so-called ‘competitiveness’, the European Commission should have no higher priority than completing the Single Market, developing the new Saving and Investment Strategy, and deepening the integration of capital markets.”
- Jonás Fernández, S&D spokesperson on economic and monetary affairs
A finance minister, in The Economist, emphasized completing the single market to reduce intra-EU barriers equivalent to a 44% tariff. The Commission's Competitiveness Compass statement underscores EU strengths while acknowledging gaps.
Reactions From the Tech Community
Technologists view the report as a wake-up call for innovation, critiquing over-regulation. EU–INC's September 2025 appeal urges Brussels to enact a "bold, founder-first 28th Regime" to turn Draghi's 170 recommendations into reforms, arguing: "If entrepreneurs win, we all win." Tech.eu echoes this, stating Europe's innovation future "hangs on the 28th Regime."
“We need the next generation of startups to reshape our economy. But startups need scale. Large pools of early investors, competitive fast financing rounds, the best possible angel and supporters. No country in Europe alone is large enough to provide a competitive scale against the US. This is a European problem, requiring a pan-European solution.”
- Andreas Klinger, Founding Partner of Prototype and one of the founders of EU–INC
Marietje Schaake and Max von Thun warn against narrow competitiveness focus, advocating broader tech sovereignty beyond deregulation. The Centre for Global Studies notes Europe's "weakness in emerging technologies," urging critical investments. Geekway's substack critiques harmonization: "Europe has never been more harmonized... yet never in worse condition," arguing it stifles disruption.
“Many European companies have been driven to seek funding and scale their business by relocating to the US and no EU company established in the past 50 years has reached a market capitalization of over €100 billion while remaining in Europe.
In order for the EU to counteract this trend, the Draghi report argues for a paradigm shifting expansion in EU research and innovation investment. This includes increasing Europe’s investment share by 5 percentage points relative to its GDP – an even larger increase in investment than the contribution from the Marshall Plan in the wake of WWII.”
- Europe’s blind spots: The critical tech investments the EU can’t afford to miss
Offering a contrarian perspective, Thomas Petersen argues that increased harmonization is not necessarily the path towards competitiveness in technology and business growth:
"Not a single Fortune 100 company have been created in EU the last 40 years. Europe have no serious players in any of the most important industries like AI, Space, Energy, Defence, Mining, Mobile, EVs, Software, Social Media, Crypto etc. All the biggest European companies were created back when there were much less harmonization, much more paperwork, much harder conditions to build anything and much more friction."
On the other hand, Alexandra Santos shares: “If entrepreneurs win, we all win," linking to the 28th Regime.
Implications for Fintech and Broader Economy
For fintech, Draghi's reforms promise streamlined cross-border operations. Unified markets could catalyze B2B growth, AI integrations, and sustainable finance, addressing low productivity. Yet, geopolitical risks and slow implementation threaten momentum.
EU Competitiveness in 2025: A Summary
One year post-Draghi, the EU's competitiveness drive persists, buoyed by Parliament's resolution but hampered by inaction. EU figures like Séjourné and Weber push alignment, while technologists like those at EU–INC seek founder-centric reforms. Success hinges on translating words into action, completing unions and boosting investments, to secure Europe's digital and economic future. Failure risks further decline in a multipolar world.