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EU Faces Economic Challenges Amid Slow Reforms and Global Competition

Updated: 2025-09-22 05:41 BST

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Top Lines

• Former ECB President Mario Draghi warns of EU's economic stagnation due to slow reforms.
• Highlights pressure from U.S. tariffs and China's rapid AI advancements.
• Calls for urgent, large-scale investment and structural reforms to boost competitiveness.

What Happened

On September 16, 2025, Mario Draghi, former President of the European Central Bank and ex-Italian Prime Minister, addressed the European Union's economic challenges in Brussels. He emphasized that the EU is lagging in economic growth and competitiveness due to sluggish reforms and insufficient investment strategies. Draghi pointed out that while the EU has proposed ambitious plans, their implementation is delayed, and governments have not fully recognized the urgency of the situation. He cited increasing pressure from U.S. tariffs, a growing trade deficit with China, and Europe's lag in artificial intelligence development compared to the U.S. and China as significant concerns. For instance, while the U.S. developed 40 large AI foundation models last year and China 15, the EU produced only three. Draghi criticized EU states for relying on temporary subsidies rather than implementing structural reforms and called for a faster, larger-scale, and united effort to promote investment and reform, stressing that breaking with tradition and encouraging private capital are essential to the EU’s future competitiveness. (reuters.com)

Why It Matters

• Economic Growth: The EU's slow reform implementation hampers its ability to compete globally, potentially leading to prolonged economic stagnation.
• Global Trade Relations: Ongoing U.S. tariffs and China's rapid technological advancements intensify competitive pressures on the EU.
• Policy Implications: The call for structural reforms and increased private investment highlights the need for policy shifts to enhance the EU's economic resilience.

Key Numbers / Facts

• The U.S. developed 40 large AI foundation models last year.
• China developed 15 large AI foundation models last year.
• The EU developed only three large AI foundation models last year. (reuters.com)

Timeline (Today, 2025-09-22)

• 05:41 BST: Summary of Mario Draghi's recent statements on EU economic challenges.

Sources

• Reuters – EU falling behind on growth, reforms even more urgent, says Draghi — published 2025-09-16 10:00 BST