In the comfortable space of the Egea reading room, students start arriving and quickly fill up the seats. Light comes from all sides through the wooden panels covering the windows. Surrounded by the Bocconi campus, students gather to listen to a panel about the future of industrial and financial Europe. The time, it seems, is eerily fitting.
The panel is composed of two eminent speakers: Mr. Luigi Gubitosi, former CEO of companies such as Wind and TIM, and Prof. Oreste Pollicino, law professor at Bocconi and co-director of the RULES research unit at Baffi-Carefin. The event is moderated by Federico Fiscaletti, the Commissioner from the think tank’s Financial Stability and Capital Markets Union Commission.
The premise behind the talk is the now famous Draghi report, which came out about a year ago and sent a rattle through Europe. The message was clear: the EU is losing ground in competitiveness. The moderator asks a series of questions to the panelists to shed light on the topic.
Why is the industrial sector struggling?
Professor Pollicino mentions that the plans at the EU level have been very ambitious, especially in digital innovation and legislation. This emerged from a need to react to the migration of ideas from the US and China, which crushed European ones. In this context, the EU took on the role of lawmaker. However, a focus on regulation loses meaning if there is no interconnection with the US and China. Indeed, regulation may actually become more dangerous internally.
Mr. Gubitosi notes that the EU is a strong exporter, and the situation is not dire in absolute terms. However, innovation has lowered in relative terms. He suggests that most answers to the questions posed are already to be found in the Draghi report.
There are three big questions to understand at the European scale: the Covid-19 pandemic and the war in Ukraine have shown Europe’s reliance on China, Russia and the United States. Is Europe enough?
Mr. Gubitosi approaches the question from a defense standpoint: dependence has become a strategic element and also a liability. Indeed, while defense is traditionally intended as a protection of boundaries, it must also be understood as strategy in interconnection.
Defense is a complex topic because, after the fall of the Berlin Wall, defense expenditure was reduced as the perception of risk abated. The US, instead, maintained dominance. Now, there has finally been a realization of its importance. To be effective, there needs to be integration between EU defense systems.
Prof. Pollicino suggests a legal perspective: common defense policy is still in the hands of Member States. However, the EU is trying to get more power for defense from the Court of Justice. This may be risky because of legitimacy.
Should capital markets be more unified before policies are implemented?
Mr. Gubitosi underscores the importance of regulation, since there is a high degree of heterogeneity between Member States. Similarly, there is a problem of liquidity if compared to other large markets, like the US and China. Hence, more unified capital markets mean more liquidity and more homogeneity. Convergence is very important, though there might be resistance from certain countries.
From a legal point of view, Professor Pollicino notes that the EU should not change its structure, but should move towards greater political will to enforce regulations.
How do we tackle problems without too much regulation?
Mr. Gubitosi starts by asking: why is Europe regulating in the first place? A substantial part of the issue comes from having many markets. In any case, the benefits outweigh the costs for most, if not all, countries. The specific case of AI is different, since the speed of development poses a problem for regulation. However, Europe can be competitive and the jury is still out.
Prof. Pollicino notes that as far as AI is concerned, regulation cannot work like in other fields since Member States may want different degrees of authority.
Is there still a possibility for a fiscal union?
Both speakers agree that it would still be feasible and very important.
After the panel discussion, the floor is opened to students who ask a number of questions ranging from sustainability to the idea of an EU army. Overall, one leaves the event with a sense that there are urgent problems to be solved, but the possibility to solve them should be an exciting one.
I’m always looking for things that give me the impression I exist. I’m not a magician, so I write. And take some pictures along the way. I also happen to be in ESS.
