EU's Pursuit of US-Style Neoliberalism
Economist Mario Draghi, a former Goldman Sachs executive, European Central Bank president, and current unelected prime minister of Italy, is on a mission to transform Europe into a neoliberal haven for the financial class. This mission is evident in his recent report titled “EU Competitiveness: Looking Ahead,” which was requested by European Commission President Ursula von der Leyen. The report outlines the policy goals of the EU, which have been in progress for some time and are set to continue.
Competitiveness or Neoliberalism?
The report focuses on the concept of competitiveness, but it seems to be advocating for policies that are more in line with neoliberalism than with improving the quality of life for EU citizens. The report suggests doubling down on self-created crises like energy policy and instigating new ones through a trade war with China.
The report argues that the EU needs to protect its industries, but it does so while pursuing neoliberal policies like austerity and escalating a trade war with China. The EU's actions suggest that what they're really seeking is to transform the EU into a neoliberal paradise, which would mean less democracy, further destruction of labor, and greater resemblance to the US.
Draghi's Prescription for Competitiveness
Draghi's report suggests that the EU needs significant investment, but this investment is not forthcoming. Instead, the EU is looking to wall off from the East and sell off to the US to create large firms necessary for technological supremacy. The EU-US Trade and Technology Council is currently working to align EU regulations with American interests, and we can expect more US dominance in the EU as Draghi and Ursula call for more mergers and acquisitions and more US private equity and venture capital.
US Takeover of European Companies
As more European companies struggle due to high energy costs and long-stagnant economies driven largely by the EU's obsession with austerity, they're increasingly becoming targets for merger and acquisition specialists from the US. This trend signifies a strategic shift by American firms, aiming to harness the diverse advantages and lucrative opportunities presented by European markets.
Competitiveness for Whom?
The report suggests that the EU needs consolidation to be more competitive, but it begs the question: competitive for whom? For instance, Italy has one of the world's most competitive telecom markets, with low prices for consumers. However, a telecom behemoth that has a monopoly in the US and Europe may be more competitive with Chinese companies in terms of profits or company value, but not necessarily in terms of consumer benefits.
Draghi's Recommendations
Draghi's report includes several recommendations, including less labor law for innovative companies, free rein to AI and tech startups, less sovereignty, more "disruption", and an overhaul of education with a focus on training workers to become productive tools for capital.
Bottom Line
The report paints a picture of a future EU that closely resembles the US, with all the associated downsides for workers. The pursuit of competitiveness as defined by Draghi and Ursula could lead to lower wages, a more flexible workforce, more private equity, more privatization, more asset-price bubbles, and more over-indebtedness for the bottom 90 percent.
While there is still time to halt the march of financialization and reverse course, the slow and methodical process of change in the EU could mean that many people fail to notice the deterioration in quality of life until it's too late.
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