August 9, 2026

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The European Post

Policy • Diplomacy • Strategic Insight

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New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya
August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya

Draghi One Year On and the Reality of Implementation

Werner Herzog
Senior Analyst, Economy and Competitiveness

A year after the publication of Mario Draghi’s report on the future of European competitiveness, the Union finds itself measuring its progress against a benchmark designed to be uncomfortable. The 2024 report described an EU economy that had fallen behind the United States and China on productivity growth, faced an investment gap of roughly eight hundred billion euros per year, and remained structurally constrained by fragmented capital markets, energy costs above its competitors’ and a regulatory framework that had not been designed with industrial scale in mind. Draghi himself characterised the challenge as existential and warned that, absent reform, the bloc faced what he described as slow agony.

The implementation record has been mixed. In September 2025, the European Policy Innovation Council launched a Draghi Observatory and Implementation Index that audited the three hundred and eighty-three specific recommendations contained in the report. The Observatory’s first reading found that forty-three recommendations had been fully implemented, seventy-seven partially implemented, one hundred seventy-six in progress and eighty-seven untouched. Counting partial progress generously, the EU had achieved roughly one third of the agenda in twelve months. Two sectors stood out for advance. Critical raw materials policy registered the highest rate of implementation at approximately one third of the relevant items completed, reflecting the Critical Raw Materials Act’s entry into force and the RESourceEU action plan. Transport ranked second at around twenty-seven percent. Clean technologies, digitalisation and energy lagged.

The Commission’s primary response to the report has been the Competitiveness Compass, presented in January 2025, which adopts much of the diagnostic frame and many of the headline recommendations but stops short on financing. Draghi argued for a substantial expansion of common borrowing to fund European-level priorities. The Compass instead leans on a more flexible state aid framework, capital markets integration through the relabelled Savings and Investments Union, and the activation of regulatory simplification. Critics including Bruegel have observed that the absence of joint financing risks pushing the cost of industrial policy back onto national budgets, with the consequence that the largest economies will lead and the smaller and fiscally constrained will fall further behind.

The competitiveness gap continues to be visible in concrete data. The International Monetary Fund estimated that internal barriers within the Single Market are equivalent to a forty-five percent tariff on goods and a one hundred and ten percent tariff on services traded between member states. The Commission has committed to completing the Single Market by 2028, with a particular focus on the services sector that accounts for the largest share of economic activity but the smallest share of cross-border trade. Concurrent work on a so-called twenty-eighth regime, which would allow firms to opt out of national company law in favour of a unified EU framework, has been included in the Compass but remains under negotiation.

Three areas merit particular attention as policy moves through 2026. The first is energy pricing. European industrial electricity costs remain a multiple of those in the United States, and the structural drivers, including dependence on imported liquefied natural gas, lower scale in domestic renewable capacity, and grid bottlenecks, will require both market design reform and capital investment. The second is the regulatory pause that Draghi has continued to urge, including for the AI Act, on the grounds that compliance uncertainty has discouraged investment in European technology firms. The Commission has resisted a full pause but has accelerated simplification under successive Omnibus packages. The third is industrial scale. Draghi proposed concentrating Important Projects of Common European Interest funding on fewer, larger projects modelled on the Japanese Rapidus chips programme, an approach that runs against the established preference for distributed funding across member states.

Draghi himself was awarded the Charlemagne Prize in 2026 in recognition of the report’s intellectual influence on European policy. The honour does not, however, resolve the question that remains at the centre of his diagnosis. The EU has agreed on what is wrong. It has not yet agreed on how much money, drawn from which sources, channelled through which institutions, will be needed to put things right. Until that question is answered, the slow agony Draghi warned of will remain a live scenario rather than a discarded one.

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