Issue Financing an additional 750 to 800 billion euros of investment a year

Summary

Draghi's central recommendation is a large increase in investment of at least 750 to 800 billion euros a year. That would lift investment from about 22 percent to about 27 percent of EU GDP, a level the report itself calls exceptionally high. The report does not see a shortage of funds as the problem, noting that EU household savings in 2022 far exceeded those in the United States. Instead, weak financial intermediation, rooted in fragmented capital markets, underdeveloped pension funds and a bank-centred financial system, fails to channel savings into productive investment. Although it stresses mobilising private capital through the Capital Markets Union, the report doubts the private sector can carry most of the burden and proposes joint funding for European public goods, including common safe assets for defence procurement and cross-border grids if political conditions allow.