EU facing existential risk without investment - report

Published On Sep 9, 2024, 11:59 AM

A report led by former ECB chief Mario Draghi warns the EU must increase its investment by €800bn annually to remain competitive against the US and China. The findings call for major reforms in industrial policy, joint borrowing among member states, and improved productivity. Draghi noted Europe's struggle with innovation and competition, especially in tech and green industries, urging swift action to avoid scaling back social and economic ambitions. The report presents 170 proposals for reform, but faces political challenges in garnering support for its recommendations.

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Stock Forecasts

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Positive

The report highlights urgent economic reform needs within the EU and calls for significant investment, which may lead to increased volatility in European markets if not addressed. Potential investments in European infrastructure and technology sectors might see positive trends if these reforms are implemented.

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Negative

European markets may face pressure from uncertainty regarding political support for the proposed measures. The skepticism from key leaders like the German Finance Minister could lead to hesitation in investments until there is a clearer commitment to reforms.

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