“Common investments are urgently needed in Europe, a genuine political process must be launched”- Corriere.it

The eurozone is like the bumblebee: according to economists, it could not fly. Yet for almost 25 years she has been going through one crisis after another. The next journey, warns Mario Draghi, must have one as its destination revision of the founding treaties of the European Union which makes it possible to create a truly common tax policy. “The strategies that ensured our prosperity and security in the past – dependence on the United States for defence, on China for exports and on Russia for energy – have today become insufficient, uncertain or unacceptable”, recalled the former Prime Minister, in his speech delivered on Tuesday in Cambridge in honor of Martin Feldstein, economist (Eurosceptic) and former president of the National Bureau of Economic Research. “The challenges of climate change and migration make it all the more urgent to strengthen Europe’s capacity to act”.

The risks of state aid

There are no other alternatives. Loosening the rules on state aid, he would create fragmentation because “governments with more fiscal space could spend much more than the others”. Individual initiatives would also be doomed to failure in the face of the complexity of the problems to be faced. “As well as the euro cannot be stable if much of the monetary union is failing, climate change cannot be solved if one country reduces its carbon dioxide emissions faster than another. The only option is therefore to centralize investment power on shared priorities at the federal level: environment, defense, health. And, consequently, to increase the European debt issues necessary to finance these expenses, at the same time launching a path to reduce the debts of the States through the tightening of fiscal rules and through growth. It would be a much more radical reform of the new EU Stability Pact which, while granting more flexibility on the accounts, does not contemplate “a rethinking of the seat of fiscal power”, to move it from the periphery to the center of the EU. How to implement it?

The reform of the treaties

“One possibility is to proceed – as has been done so far – with technocratic integration, making apparently technical changes and hoping that political ones will follow,” explains the former ECB president. “This approach has worked with the euro, making the EU stronger, but the cost has been high and progress has been slow.” The other option, preferred by Draghi, «is start a genuine political process, with an explicit ultimate goal from the outset and approved by the voters in the form of an amendment to the EU treaties”. The revision should take into account “the growing number of common objectives and the need to finance them together, which in turn requires different methods of representation and decision-making at the central level”, avoiding that individual governments or minority fronts of countries have the right veto on EU strategic choices.

The previous

Draghi has not forgotten the unfortunate outcome of the project for a Constitution for Europe, rejected in 2005 by two popular referendums in France and the Netherlands and since then shelved. «I am convinced that the europei are more ready than 20 years ago to take this route, because today they only have three options: paralysis, exit or integration». The first is feared by citizens due to growing external threats to the EU, led by Russia. The second discounts the not very reassuring precedent of Brexit. “Since stagnation and exit appear unattractive, the relative costs of further integration are now lower,” concludes Draghi. “In this historic moment, we cannot stand still or, like Jean Monnet’s bicycle, we will fall.”