Compete or Disappear (I): the diagnosis

The model Europe lived on is gone. Draghi says so without equivocation. The first of three reviews of "Compete or Disappear"

I cannot remember a political text this unsparing since, forty years ago, I sat in Giovanni Sartori's lectures at the Cesare Alfieri faculty in Florence. Sartori dismantled received ideas with the detachment of a surgeon opening a body: without mercy, but without cynicism either, because behind the scalpel was always the conviction that clear thinking serves better decisions. Reading Compete or Disappear, I found that sensation again. Draghi does not write to be quoted at conferences. He writes to be believed, and to force the reader to choose a side.

The title leaves no room for hedging, and that is already a statement of method. Not "reform or adapt", not "change or resist". Compete or disappear. Draghi takes the report he delivered to Ursula von der Leyen in 2024, fuses it with the editorials he wrote for the Financial Times, and produces something closer to a manifesto than a policy document. Those expecting the measured language of a central banker will be caught off guard.

The model is dead

The diagnosis begins with a funeral. For decades, Europe built its prosperity on three pillars that Draghi says have now collapsed — not temporarily, but permanently: cheap Russian energy, open markets for exports to China, and free American military protection. These were the silent foundations on which everything else rested: the welfare state, social cohesion, even the assumption that Europe could afford to be generous with itself. Remove those foundations and what remains is a structure that can no longer bear its own weight.

This is not a new analysis. What is new is the tone. Draghi does not present it as one challenge among many to be managed with institutional patience. He presents it as a junction already passed — one at which Europe simply failed to notice it was falling. The Italian case illustrates the point precisely. Industria 4.0 had worked: targeted incentives, real investment in machinery, measurable results. Then the Meloni government replaced it with Transizione 5.0, which failed almost immediately. A year later the government reversed course, reinstating the original scheme — and on the first day eligible firms exhausted the entire available budget. The demand is there. The political will to sustain a policy beyond the next election cycle is not.

The number that matters most

There is one figure in the book that outweighs every other page: the average European household is today roughly 30 per cent poorer than its American counterpart. The gap opened thirty years ago, when the internet boom sent the United States racing ahead and Europe stood still. It has never closed.

What makes the book urgent, rather than merely accurate, is that the same story is about to repeat itself. The Federal Reserve Bank of Cleveland estimates roughly a 40 per cent probability that the American economy is entering a new high-productivity cycle, comparable to the late 1990s boom, this time driven by artificial intelligence. If that assessment is correct, Europe risks turning a historical gap into a structural one — permanent, and very nearly impossible to close.

What kind of Europe, then

This, in my reading, is the true revolutionary core of the book — more so even than the economic diagnosis. Draghi certifies the death of the old model, but I believe he also points, between the lines, towards a remedy far more radical than the cautious language of the 2024 report suggested. In the preface, Martin Wolf writes that European fiscal rules cannot work without a centralisation of spending power, and that integration will have to begin with a core group of states — the eurozone — building a genuine fiscal union and a common defence from there. These are measured words. But taken seriously, they lead to a conclusion the book never states in these terms, and which strikes me as the only coherent reading: European nation-states, taken individually, are now too small to matter in a world shaped by Washington and Beijing. The only path is to build, piece by piece, something resembling a United States of Europe.

I say this not because Draghi writes it in so many words. I say it because it is what the logic of his argument demands, if you follow it to its conclusion without stopping halfway out of diplomatic scruple. Twenty-seven separate budgets, twenty-seven public debts with different credit ratings, twenty-seven armies buying different weapons from the same American suppliers without ever conducting joint research: this is a portrait of collective irrelevance dressed up as national sovereignty. None of these states, taken alone, has the scale to negotiate as an equal with Washington or Beijing.

The telling precedent is the single currency. The euro was not born from a treaty that convened all member states at the same table from day one. It grew from an initial core of countries willing to move first, to which others joined over time as political and economic conditions allowed. The path I discern in Draghi's reasoning — on fiscal union, on permanent common debt, on integrated defence — appears to follow exactly that template: not a grand treaty refounding the Union overnight, which all twenty-seven would never ratify simultaneously, but a narrower group of states that begins, experiments, demonstrates that it works, and over time draws others in. A method, in effect, for bypassing the deadlock of unanimity without saying so openly.

The price, and there is no point softening it, is sovereignty. Transfer of fiscal power to the centre, an end to unanimity voting, a single financial supervisor on the model of America's SEC. This is the historic choice Europe has been deferring for seventy years. Draghi, in my judgement, makes it for the first time genuinely unavoidable.

There is no third way

The conclusion of this first instalment of Draghi's argument is almost brutal in its simplicity. The choice is not between reform and the status quo. It is between reform and what he calls, without euphemism, "slow decline". There is no safe waiting room. Standing still is not neutral — it is already a form of retreat.

It is the same lesson Sartori used to deliver without raising his voice: intermediate positions and compromises that pass for prudence are often no more than elegant ways of deferring the real choice. Draghi, forty years on from those Florentine lecture halls, seems to be saying the same thing to an entire continent.