Lhe European Commission summoned its Roman gods to lead Europe towards other shores: Enrico Letta, former president of the Council of Ministers of Italy, presented to the European summit of the Twenty-Seven, on April 18, his report on the reform of the European single market aimed at preventing disengagement from the United States and China; Mario Draghi, also former president of the Council of Ministers of Italy and former president of the European Central Bank (ECB), is due to submit his report on the competitiveness of the European Union (EU) in June, but he presented its substance on April 16 at the High-Level Conference on the European Pillar of Social Rights (translated by the journal The Great Continent).
The two agree on the observation of a penalizing fragmentation: too many internal borders prevent the single market from truly being one. Hence the absolute necessity, according to them, of the union of capital markets, without which the abundant European savings will continue to flee abroad, in particular towards the United States, instead of financing the needs of investment from the Old Continent. Will this be enough to reach the shores of the next world and drive away this increasingly strong feeling that “our Europe is mortal”, as Emmanuel Macron said at the Sorbonne on April 25?
Not sure, because this fragmentation, pointed out as the cause of the European disconnection, is at the same time the consequence of a profound construction defect. Europe suffers from its incomplete union between member states which have agreed to share the euro and the ECB, but not their budget or their taxation (“ A European budgetary and fiscal pact in the face of crises », Thomas Piketty and Antoine Vauchez, Political Economy noto 101, 2024). As a result, member states have few common expenses.
Absence of scale effects
Mario Draghi deplores this regarding the public procurement market, which in fact remains fragmented, which particularly affects defense and security spending, which is far too fragmented at a time when Europe must restore its sovereignty in this area. But he does not say the cause: it is precisely because there is neither a common budget worthy of the name, nor common taxes, that there is very little common revenue between the Member States. , and therefore not enough common expenses. The absence of scale effects, which he deplores, regretting that Europe does not naturally take advantage of its size as the large competing continental economies (United States, China) achieve, also comes from this incomplete union.
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