XPost: alt.politics.europe.misc, alt.politics.trump, talk.politics.guns   
   XPost: sac.politics, alt.home.repair   
   From: jwhite@none.com   
      
   Former European Central Bank President Mario Draghi urged the EU to get   
   its own house in order by addressing trade barriers between member states,   
   while downplaying the relative harm from potential US tariffs.   
   The obstacles that European Union members impose against each other do   
   much more economic harm than the US could with tariffs, former ECB   
   President Mario Draghi said.   
      
   In a column in the Financial Times on Friday, he highlighted the EU’s   
   inability to ease supply constraints, especially high internal barriers   
   and regulatory hurdles.   
      
   “These are far more damaging for growth than any tariffs the US might   
   impose — and their harmful effects are increasing over time,” he wrote.   
      
   President Donald Trump has imposed 10% tariffs on China, paused 25% duties   
   on Canada and Mexico, announced 25% tariffs on steel and aluminum, while   
   signaling Europe will be targeted soon.   
      
   By contrast, Draghi cited IMF estimates that show Europe’s internal   
   barriers are equivalent to a 45% tariff on manufactured goods and a 110%   
   levy on services.   
      
   As a result, trade between EU members is less than half what occurs   
   between US states, and as services account for a greater share of economic   
   activity, the impact of Europe’s barriers grows more severe, he added.   
      
   Meanwhile, trade barriers with countries outside the EU have been falling,   
   making imports more appealing and prompting Europe’s companies to seek   
   growth opportunities abroad.   
      
   That’s made the EU more dependent on—and vulnerable to—trade, which now   
   accounts for 55% of the eurozone’s GDP, up from 31% in 1999. Comparable   
   figures for China ticked up to 37% from 34%, while the US’s share edged up   
   to 25% from 23%.   
      
   But the problems with Europe’s economy aren’t just on the supply side.   
   Governments have tolerated weak demand since the 2008 financial crash,   
   Draghi said.   
      
   That reluctant to juice demand is exemplified by a wide gap in fiscal   
   policies, namely the willingness to spend more than what comes in from tax   
   revenue. From 2009 to 2024, the US government funneled the equivalent of   
   14 trillion euros into the American economy via primary deficits versus   
   just 2.5 trillion euros in the eurozone, he estimated.   
      
   Having detailed a plan last year for Europe to revive its economy, Draghi   
   argued governments have the power to turn things around—if they   
   fundamentally change their mindset away from national goals and action.   
      
   “But it is now clear that acting in this way has delivered neither welfare   
   for Europeans, nor healthy public finances, nor even national autonomy,   
   which is threatened by pressure from abroad,” he concluded. “That is why   
   radical change is needed.”   
      
   Fears of a US-Europe trade war have focused more attention on the EU’s   
   lack of growth, but alarm bells have been going off for a while.   
      
   Germany, Europe’s largest economy, has been mired in an economic crisis,   
   and France’s economy has stagnated too. Both countries are also locked in   
   political upheavals that stand to slow any responses.   
      
   Nobel laureate Michael Spence warned in August that Europe is suffering   
   from an innovation deficit and weak productivity, putting its economy on a   
   path to stagnation.   
      
   The economist said long-term productivity growth depends on structural   
   change, led by new technology.   
      
   “This is where Europe’s principal problem lies: In a range of areas, from   
   artificial intelligence to semiconductors to quantum computing, the U.S.   
   and even China are leaving Europe in the dust,” he wrote in a Project   
   Syndicate op-ed.   
      
   https://fortune.com/2025/02/16/europe-economy-trade-barriers-regulation-   
   mario-draghi-us-tariffs-trump/   
      
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