Mario Draghi urges EU to deepen economic integration in response to war

Mario Draghi has urged the EU to streamline its decision-making and deepen economic integration as the union seeks to respond to the upheaval triggered by Russia’s invasion of Ukraine.

The Italian prime minister told the European parliament on Tuesday that the EU needed to embrace “pragmatic federalism” in multiple policy areas including defence, foreign policy and economic burden-sharing given the crisis unfolding to its east. If the reforms required the EU to reopen its treaties then it should be prepared to do so, he added.

“The institutions set up by our predecessors over the past decades have served Europe’s citizens well, but they are inadequate given the reality that confronts us today,” he said in Strasbourg. “We need a pragmatic federalism: one that encompasses all the areas affected by the transformations taking place — from the economy, to energy, to security.”

The EU responded rapidly to the Ukraine crisis, unleashing multiple rounds of sanctions on Moscow and offering generous terms to Ukrainian refugees. However, the crisis is prompting some policymakers to call for bolder reforms given the threat from Russia.

Among Draghi’s proposals are a call for the EU to abandon the requirement for most common foreign and security policy decisions to be adopted only by unanimity among member states. This comes as they debate this week whether to impose new sanctions on Russia, including an oil embargo — a proposal that has encountered resistance from EU capitals including Budapest.

“We must overcome this principle of unanimity, which leads to a logic of crossed vetoes, and move towards decisions taken by a qualified majority,” said Draghi. “A Europe capable of making timely decisions is a Europe [that] is more credible vis-à-vis its citizens and vis-à-vis the world.”

Among Draghi’s other proposals are improved joint mechanisms to handle migration, and greater co-ordination on defence. While the combined defence spending of EU member states is about three times that of Russia, he said the EU operated a total of 146 defence systems — compared with just 34 in the US.

Such fragmented defence spending, he said, was “a profoundly inefficient distribution of resources, which hinders the construction of a true European defence”. To tackle this problem, he urged the EU to convene a conference on rationalising and optimising defence spending by member states.

Draghi also revived calls for the EU to build on its joint response to the Covid-19 crisis, including in the realm of common borrowing.

This could involve extending a joint EU unemployment insurance programme to permit lending to member states needing help to mitigate rising energy costs, he said.

In addition, he argued that the EU should build on its €800bn NextGenerationEU economic reconstruction plan to support investments in defence and industrial security.

Meanwhile, Draghi reiterated Rome’s strong support for Ukraine, and its accession to the EU, although he said that Italy hoped for a truce that would pave the way for negotiations.

“In a war of aggression there can be no equivalence between those who invade and those who resist,” he added. “Protecting Ukraine means protecting ourselves and the project of security and democracy that we have built together over 70 years.”

Draghi also affirmed Italy’s support for the EU to move swiftly on expanding to include other members, with the immediate opening of accession talks with Albania and North Macedonia, giving new impetus to talks with Serbia and Montenegro, and paying more attention to “the legitimate expectations” of Bosnia and Herzegovina, and Kosovo.

“We are in favour of the entry of all these countries,” he said. “We must follow the entry path we have drawn but we must move as quickly as possible.”