The Draghi report, two years on: what it asked for, what has been done and what the data say today

What the Draghi report is

In September 2023, Ursula von der Leyen asked Mario Draghi, former president of the European Central Bank, for a report on the future of European competitiveness. He delivered it on 9 September 2024 in two parts: a strategy of around seventy pages and a detailed analysis by sector. The Bank of Spain counts 176 proposals in it, which it groups into nine pillars; the European Policy Innovation Council (EPIC) observatory, which follows the sector chapters, breaks them down into 383 recommendations.

His thesis is simple. Europe needs to grow faster and become more productive to pay for three things at once: leading in new technologies, decarbonising its economy and defending itself. If it fails, it will have to choose between them, and will not be able to finance its social model either. In the foreword, Draghi called this "an existential challenge".

The diagnosis: Europe grows less

The starting point is growth. Between 2000 and 2025, US real GDP rose 69%; the EU's, 41%. China multiplied its GDP by 6.9. The report adds that, per person, real disposable income has grown almost twice as much in the US as in the EU since 2000.

According to Draghi, the main cause is productivity: it explains around 70% of the gap in GDP per person with the US. Later data have not closed that gap. In 2019, the EU produced 7% less per hour worked than the US; in 2024, 13% less.

Three fronts: innovation, energy and defence

Innovation. Only four of the world's 50 largest tech companies are European, and between 2008 and 2021 close to 30% of the unicorns founded in Europe moved their headquarters abroad, nearly always to the US. The report estimates that European companies spent around 270 billion euros less than US ones on research and innovation in 2021. OECD data show the same gap: in 2024 the EU spent 2.13% of its GDP on R&D, the US 3.45% and China 2.69%. China has been ahead of the EU since 2015. The difference lies mainly in business: European companies invest just over half as much as US ones relative to GDP.

Energy. According to the report, European companies paid two to three times as much for electricity as US ones, and four to five times as much for gas. Eurostat does not compare with the US, but it does show how prices have changed within the EU. In the second half of 2025, a medium-sized business paid 15.96 cents per kWh on average, excluding VAT and recoverable taxes, 54.8% more than in the same half of 2019. The price has risen in 26 of the 27 countries; in Finland it is practically unchanged (-0.3%). The differences between them are huge: 23.66 cents in Cyprus and 21.87 in Ireland, against 6.74 in Finland. In Spain, 11.91.

Defence. Draghi noted that the EU as a whole is the world's second largest military spender, but that its industry is fragmented: twelve different types of battle tank are used in Europe; the US builds one. Since then, spending has risen fast. In 2025 the EU spent 2.18% of its GDP on defence, its highest level since 2000 and above China (1.73%). In 2015 it was 1.3%. The US remains far ahead, at 3.12%.

The bill

To do all this, the report estimates that the EU needs to invest at least an extra 750 to 800 billion euros a year, 4.4% to 4.7% of its 2023 GDP. Investment would have to rise from around 22% of GDP to 27%. For comparison, the Marshall Plan amounted to 1% to 2% of GDP a year between 1948 and 1951. Draghi also called for some joint funding of European public goods, such as breakthrough innovation.

Investment has not taken off. In 2025, the EU invested 21.3% of its GDP, almost the same as the US (21.4% in 2024) and far from 27%. And the bill has grown: in September 2025, Draghi himself cited an ECB estimate that raises the needs to almost 1.2 trillion euros a year between 2025 and 2031, mainly because of defence spending.

Two years on: what has been done

1. 9 September 2024Draghi presents the report in Brussels.
2. January 2025The Commission presents the Competitiveness Compass, its roadmap based on the report.
3. May 2025The Council adopts SAFE: up to 150 billion euros in EU loans for joint defence procurement.
4. 16 September 2025"One year after" conference. The Commission says 90% of its flagship initiatives are inspired by the report; Draghi warns that Europe is in a harder place.
5. March 2026The European Council launches the "One Europe, One Market" agenda.
6. 24 April 2026Parliament, Council and Commission sign its roadmap, with agreement on all initiatives by the end of 2027 at the latest.
7. July 2026EPIC's index counts 60 of the 383 recommendations as fully implemented (15.7%); in January it was 15.1%.
8. September 2026Independent trackers agree: real progress, but slow and uneven.

How much has been implemented depends on who is counting and how. The most detailed tracker is EPIC's index, which classifies each of the 383 recommendations into four states with a panel of experts: implemented, partly implemented, in progress (there is political commitment, but no rule or instrument in force) and not implemented.

• In July 2026, 60 recommendations were implemented (15.7%), 98 partly implemented (25.6%), 160 in progress (41.8%) and 65 not implemented (17%).
• The pace has slowed. Fully implemented measures rose from 11.2% in September 2025 to 15.1% in January 2026, but only to 15.7% in July. Including partly implemented ones: from 31.4% to 38.9% and 41.3%.
• Defence is the sector that has advanced most: fully or partly implemented measures rose from 14.3% to 78.6% between September 2025 and July 2026, although there are only 14 of them. Energy, the sector with the most recommendations (83), is at the bottom: only one fully implemented and 21.7% fully or partly. Digital and tech stands at 29.8%.
• EPIC assigns each measure to a Commission directorate-general. The energy DG has fully implemented 2.7% of its measures; the competition DG, none.

Two other trackers reach a similar picture with different counts:

• Bank of Spain (8 September 2026): it starts from EPIC's data but sorts them into its own nine pillars. In energy, fully implemented measures barely exceed 1%; in critical raw materials, almost 40%. In its defence pillar, fully or partly implemented measures rise from 22% to 53%, a different figure from EPIC's because it groups other measures together.
• JEDI Draghi Tracker (10 September 2026): 26% of the recommendations have been implemented and none of the 30 key ones has been fully executed. By area, energy and raw materials reach 35%, and health 13%.

The figures cannot be compared with each other: each tracker counts the recommendations differently and groups them into different areas. JEDI, for example, puts energy together with raw materials. What does coincide is the picture: things with a shared sense of urgency, such as defence or critical raw materials, have moved, and much less so the things that would change most, such as energy or investment financing. And not everything is about money: according to the Bank of Spain, 53% of the proposals need no additional public investment.

What the data say today

Two years on, the data confirm the diagnosis more than the cure. The productivity gap with the US was wider in 2024 than when the report was written, investment remains around 21% of GDP, far from the 27% the report called for, and electricity for industry costs 54.8% more than in 2019, before the energy crisis. The most visible change is in defence, where spending has now passed 2% of GDP. European leaders have given themselves until the end of 2027 to close the agreements. The next data will show whether they make it in time.

Read the full theme: Productivity and growth