CEOs back Mario Draghi’s plan to boost Europe’s competitiveness

Good morning, Peter Vanham here from Geneva.

A report by former Goldman Sachs banker and European Central Bank President Mario Draghi on ways to improve Europe’s competitiveness, released this week, won immediate support from some of Europe’s biggest figures. European Commission President Ursula von der Leyen stood by Draghi as he presented his findings. And yesterday, current ECB President Christine Lagarde said Draghi’s plans could be “extremely helpful” as she cut interest rates.

But perhaps even more notable was the support from European Fortune 500 companies.

Christel Heydemann, CEO of Orange, Europe’s third-largest telecoms company and 310th on the Fortune Global 500 list, told me yesterday that “everyone among her colleagues supports” Draghi’s plans, which include practical recommendations on everything from how to boost investment in innovation to how to protect Europe from unfair competition from China.

“If we don’t radically change the way Europe is organised, we will witness a long, slow decline. That’s what the citizens of Europe feel, (and) that’s what we see,” Heydemann said.

The most appreciated element of the Draghi report is its support for easing antitrust rules.

Draghi said the EU should make it easier for telecoms mergers to take place by assessing deals at EU level rather than at national level, a point Heydemann repeated yesterday. “If we look at markets in a small way, mergers won’t happen,” she said. “We need companies with greater investment capacity.”

My interpretation is that Draghi’s recommendations could represent a turning point for Europe in three areas.

First, we are likely to see more major mergers and acquisitions between Fortune 500 companies in Europe due to looser and faster antitrust processes. Second, we are likely to see (debt-financed) investment growth of up to €800 billion per year. And third, Europe is likely to show its teeth against Chinese (and to a lesser extent American) competition.

Whether that will be enough to halt Europe’s “long, slow decline,” as Heydemann put it, remains to be seen. But it will certainly usher in a new era for a bloc whose hallmarks have been liberalization, free competition and openness.

As a reminder, we will also discuss these topics at our Fortune CEO Forum in London, October 23-24, and at our Fortune Global Forum, November 11-12, in New York. You can request an invitation here.

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Peter Vanham
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This story was originally published on Fortune.com