The 27 heads of state and government of the European Union are meeting today at the Belgian castle of Alden Biesen for an informal summit on competitiveness, focusing on issues such as strengthening the single market and simplifying regulations. The pre-summit presentation will be based on a paper drafted by Italy, Germany, and Belgium.
Single Market and Investment: Letta and Draghi's Report
From economic integration to industrial revitalization: the pillars of the two texts.
The reports of former Italian Prime Ministers Enrico Letta and Mario Draghi are the two pillars of the European Union’s economic agenda for the 2024-2029 political cycle.
Letta’s was commissioned by the Council and presented to EU leaders in 2024 and is dedicated to the single market. Mario Draghi’s was requested by the Commission, presented in September 2024, and concerns economic competitiveness.
THE REPORT READ
* INCOMPLETE SINGLE MARKET. It is the starting point of the former Prime Minister’s work and the answer is already in the title, ‘Much more than a market’. The underlying idea is that the single market is the main force of European integration, but it remains incomplete and unsuitable for global competition due to regulatory fragmentation between Member States, with companies too small compared to those in the US and China. With obstacles to growth also due to services, energy, finance and telecommunications with a strongly national character.
* SAVINGS AND INVESTMENT UNION. The Letta report, 146 pages, calls for completing the single market in strategic sectors (energy, defence, digital, finance), creating a Savings and Investment Union to mobilise European private savings, simplifying rules and bureaucracy and strengthening European industrial policy.
* THE 28TH REGIME FOR COMPANIES. Strong emphasis is given to the ‘fifth freedom’: that of research, innovation and knowledge, to be combined with the free movement of goods, people, services and capital. One of the report’s ‘workhorses’ is the urgency of creating a 28th regime for businesses, allowing them to fully unleash their potential in the single market. The single market will then be used to finance: green transition, digital, security, defence and enlargement of the European Union.
THE DRAGHI REPORT
* THE EU ON THE VERGE OF DECLINE. ‘The future of European competitiveness’ is based on the underlying idea that Europe faces a risk of structural economic decline compared to the United States and China. It has much lower productivity growth than the US, lagging behind in advanced technologies, overregulation, more expensive energy, and underinvestment. For Draghi, the EU is at a “breaking point” to address by acting quickly.
* INDUSTRIAL REVIVAL AND INVESTMENTS. Draghi identifies three strategic priorities: closing the technological gap, decarbonizing without deindustrializing, and strengthening economic security and defense. It calls for having a strong European industrial policy, for making large-scale common investments, for supporting strategic industries, for aiming for an integrated European capital market by reducing regulatory fragmentation.
* NEW COMMON DEBT. For Draghi, the EU must significantly increase public and private investment to support innovation, energy transition, and defense. Investments of up to €750-800 billion a year are needed, and the solution is to continue issuing common debt instruments, such as the Next Generation EU.
Premier Sanchez.
Eurobonds and Buy European, Sanchez’s position at today’s EU summit in Alden Biesen. Spain supports new common debt and a multi-speed Europe. The Spanish Prime Minister will not attend the pre-summit promoted by Italy, Germany, and Belgium.
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