In the context of the debate on the future of the European Union, the recent speech by Mario Draghi - delivered exactly one year after his first report - offered a comprehensive vision of the priorities needed to relaunch the continent’s competitiveness and technological capacity. He also warned that decision-making inertia threatens Europe’s sovereignty, putting its growth model at risk.
The proposals presented are closely linked to the initiatives announced by European Commission President Ursula von der Leyen in her recent State of the Union address, outlining a shared agenda of reforms and investments aimed at strengthening Europe’s position in the global landscape of innovation and economic security.
Innovation as the Strategic Axis of Competitiveness
Draghi’s analysis identifies innovation as the strategic axis of European competitiveness, highlighting first and foremost the gap accumulated in comparison with China and the United States in developing foundational artificial intelligence models, a technology increasingly regarded as “transformational,” much like electricity 140 years ago.
This strong wake-up call has been acknowledged, and proposals have been made for the creation of large-scale AI infrastructures, including five facilities capable of hosting more than 100,000 GPUs each, a significant expansion of data centre capacity, and the introduction of a voluntary unified regulatory framework, the so-called “28th Regime”, designed to allow companies to operate within the single market without fragmentation. The initiative follows the example of simplification models such as the Single Digital Gateway, which facilitate interaction between citizens and public administrations.
The strengthening of European research and innovation programmes - such as Horizon Europe (to be increased to €175 billion), Digital Europe, and EU4Health - has been identified as an essential lever to support high-tech, high-risk projects, inspired by the DARPA research model in the United States, characterised by funding for bold and innovative projects. However, their implementation must be entrusted to entities with high-level project management capabilities.
A European Push for AI, Clean Tech and Security
Within this same framework, the European Commission has already mobilised over €1 trillion for innovation, clean technologies and security, allocating around €200 billion to artificial intelligence and €20 billion specifically to gigafactories.
New strategies on quantum technologies, industrial scale-ups, and the “Apply AI” and “Choose Europe” initiatives fit into this framework, together with three priority legislative acts - the EU Cloud & AI Development Act, the European Innovation Act, and the 28th Regime - which will form the basis of the Commission’s 2026 Work Programme.
Simplifying Europe’s Digital Regulation
This technological acceleration, however, cannot take place without a review of digital regulation. On the regulatory front, the need to simplify the GDPR and harmonise its application across the twenty-seven Member States has been emphasised. It will be interesting to see whether other regulations - such as the European Health Data Space (EHDS) or eIDAS (for the Digital Wallet) - will require similar harmonisation.
A more pragmatic approach to the implementation of the AI Act has also been suggested, with a temporary suspension for high-risk systems and ex post oversight based on the actual performance of the models. In addition, the Commission has announced the development of codes of conduct and guidelines for artificial intelligence, as part of a broader legislative simplification process through “omnibus” packages and the future introduction of a Digital Fairness Act.
Energy and Investment Challenges
On the energy front, attention was drawn to the persistent divergence in energy prices compared with other markets, with European gas costing four times more than in the United States and industrial electricity prices more than double. Anticipating a 70% increase in data centre demand over the next five years, proposals include joint gas purchasing mechanisms and the extension of long-term contracts. The Commission has incorporated these measures into the Clean Industrial Deal and the Action Plan for Affordable Energy, announcing a European Grids Package as a key tool for the structural reduction of energy costs.
From a financial perspective, it is estimated that annual investment needs will reach around €1.2 trillion between 2025 and 2031 (up from €800 billion a year ago), with public investment accounting for just over 40%. The need for common financial instruments, including the possible issuance of European debt to support shared projects, and the acceleration of a Union for Savings and Investments, has been highlighted. At the same time, the Commission intends to use TechEU and the European Investment Bank to foster the growth of innovative enterprises, complete the architecture of the Single Investment Union (SIU) and improve access to venture capital under the next multiannual financial framework.
Industrial Policy and a Stronger Single Market
Regarding the single market, the role of the 28th Regime has been reaffirmed as a key driver of economic integration, alongside a reform of the telecommunications sector and faster merger procedures in strategic fields such as defence and space. The new Single Market Strategy and the 2028 roadmap confirm this direction, with the goal of enhancing the efficiency and competitiveness of the European market.
On the trade front, the need to reduce strategic dependencies and swiftly conclude already negotiated agreements - such as the one with Mercosur - has been underlined to consolidate stable economic partnerships. New initiatives with India and the Mediterranean region follow the same logic of diversification and value chain strengthening.
In terms of industrial policy, the proposals aim to overcome the limitations of current IPCEIs through continent-wide coordination of state aid and a more strategic use of public procurement as a lever to generate technological demand. Particular attention has been given to the defence, semiconductor, and automotive sectors, which are considered priorities for European industrial sovereignty. The SAFE platform, promoted by the Commission, serves as an operational instrument to accelerate strategic investments and reinforce economic security, alongside parallel initiatives such as the revision of Europol’s mandate and the Roadmap for European Defence Readiness.
Towards a Faster, More Integrated European Governance
Finally, on the governance side, there is a strong call for a faster and more coordinated European approach, based on mechanisms of enhanced cooperation, binding deadlines, and greater accountability - ideally supported by tools more typical of a federation than of a confederation, allowing quicker and more coherent decision-making. More than half of the initiatives foreseen in the Draghi Plan have already been launched, with tangible benefits in terms of administrative simplification and estimated savings of over €8 billion. The definition of a joint legislative priority declaration among the Commission, Parliament, and Council represents a further step towards a more integrated and results-oriented governance, with the ambition of building a European Union capable of competing globally with new speed, scale, and intensity.