Hello and welcome to the Centre for European Reform podcast, Unpacking Europe.

I'm your host, Octavia Hughes, and today we'll be discussing the hotly

anticipated report by former Italian Prime Minister Mario Draghi on European Competitiveness,

which was published on the 10th of September. So I'm joined with some of our experts to discuss

the contents of the report and what they make of it. Welcome to the podcast

to our senior research fellows, Luigi Scatzieri and Elizabeth Cornago, our chief economist,

Sandra Toadwa and our assistant director, Zach Mayers. Sanda, if I could start with you,

what does Draghi identify as the key factors ailing the European

economy? Thanks. I think he's quite outspoken and in some ways very downbeat on the trajectory

that the European economy is on. He points out that European growth has fallen quite far behind

that of the US and that around 70% of that growth gap is attributable

to a lack of productivity growth, which is the most disturbing sort of source of the gap.

And he's quite unforgiving in saying, you know, over the long run, if you look at the lack

of innovation capacity in Europe, the lack of business dynamism, turnover in terms of having new companies come out,

the future looks quite bleak. And so his message really is here that slow growth may not be an

immediate political problem, but in his words, it could impose over time, particularly as

geopolitical tensions mount, an agonizing slow end to the European economic and social

model. And so this is, I think, his main message saying Europe is fundamentally in trouble here

and needs to wake up and come up with a coherent growth plan. And I think he should be applauded

for speaking so clearly and not mincing his words, which is often a problem with these types of

reports, that there are too many cooks in the kitchen. The author doesn't quite know what he wants

to say. There's too much internalization of political pressures. And I think Draghi should get a lot

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