Mario Draghi on Budget
TL;DR
Mario Draghi strongly advocates for a radical redesign of the European Union's budget structure, focusing on increased joint investment and new revenues.
Key Points
He proposes a larger and refocused Multiannual EU budget to compensate for tighter national fiscal constraints in the short term.
The report calls for an additional annual investment requirement exceeding €800 billion to meet competitiveness goals, requiring joint European debt.
Draghi suggests that EU research funding, such as the proposed €175 billion for Horizon Europe, must concentrate resources into sizeable priority programmes to be effective.
Summary
Mario Draghi’s core position on the Budget centers on the urgent need for fundamental economic and institutional changes within the European Union to boost productivity and competitiveness against global rivals. His comprehensive report highlights that current EU per-capita income growth is insufficient to fund the required annual additional investment of around €800 billion needed for the green and digital transitions, necessitating a substantial increase in the EU budget. A key proposal involves building a central fiscal capacity, funded partly by joint European debt, to act as the linchpin for a new industrial policy focused on European Public Goods.
This push for a reformed budget structure is contextualized by the end of an era reliant on cheap energy and external markets, placing fiscal constraints on national maneuverability, particularly with new debt repayment obligations looming from recovery programs. He suggests this larger, refocused Multiannual Financial Framework (MFF) must be accompanied by new own resources to finance these ambitions without solely relying on national contributions. The implementation of his vision requires overcoming political resistance to deeper integration and shared economic sovereignty, which he views as necessary to safeguard the European social model while achieving strategic autonomy.
Key Quotes
The planned increase of Horizon Europe to €175 billion is welcome. But for breakthrough research, this will fall short unless the additional resources are concentrated into sizeable priority programmes.
EU research funding should focus on sizeable priority programmes.
Frequently Asked Questions
Mario Draghi believes the EU budget must undergo a radical redesign to finance massive investments needed for green and digital transitions and competitiveness. His position favors a substantial increase in the budget, financed partly through new own resources and the creation of a central fiscal capacity.
Yes, his recommendations include pooling resources through common European debt to finance large-scale projects that boost productivity, such as breakthrough innovation and defense R&D. He suggests this would allow Europe to act with the necessary scale and intensity.
While welcoming the proposed funding increase for Horizon Europe, Mario Draghi stated that the amount will fall short unless the resources are concentrated into sizeable priority programmes. He stresses focusing funding on high-risk, high-reward projects.
Sources7
The Draghi report on EU competitiveness
The Draghi Report: A Strategy to Reform the European Economic Model
Draghi's message: sharing economic sovereignty is hard but possible
Op-ed: Why Europe's next long-term budget must fix its revenue model
EU research funding should focus on 'sizeable priority programmes,' Draghi says
Mario Draghi in Brussels—One Year On
Mario Draghi, influential EU economist, receives 2026 SIEPR Prize
* This is not an exhaustive list of sources.