Former European Central Bank president Mario Draghi has warned that the public share of the investments the EU needs has “almost doubled” and called for a coalition of willing member countries to consider issuing common debt.

Speaking at a Commission high-level conference a year on from the release of his landmark report on EU competitiveness, Draghi said that the ECB now calculates that from 2025 to 2031 the EU needs to invest “€1200 billion, up from €800 billion a year ago.”

Thanks mainly to rising defense spending needs, “the public share has almost doubled, from 24 percent to 43 percent,” he said.

The call comes in a challenging economic context, where countries have limited fiscal space and growth forecasts have been overly optimistic. “One year on, Europe is therefore in a harder place,” he said.

Draghi’s 2024 report proposed boosting private investments, deepening the integration of EU financial markets, and issuing common debt at the EU level to fund investment in projects such as energy infrastructures and disruptive technologies.

But we are running out of time and “there is no clear path to finance the investments we need,” he said.

“Europe must act less like a confederation and more like a federation, but such reform will take time, time we may not have,” he said.

“The logical next step is to consider common debt for common projects, whether at the EU level or among a coalition of member states.”

He said that Europe’s dependency on the US meant it had accepted a trade deal “largely on American terms,” while dependence on Chinese critical materials reduced the EU’s ability to counter Beijing’s support for Russia.

“Inaction threatens not only our competitiveness, but also our sovereignty,” he warned.