Europe faces a critical choice between overcoming its "old divisions" to become a "genuine power" or remaining "subordinated" to the global agendas of the United States and China, former European Central Bank chief Mario Draghi has warned.
Speaking at KU Leuven university, where he was awarded an honorary doctorate, the former Italian prime minister argued that the geopolitical landscape has shifted dramatically, the Sun reports.
"Of all those now caught between the US and China, Europeans alone have the option to become a genuine power themselves," Draghi said.
He presented the bloc with a stark binary: remain "merely a large market, subject to the priorities of others," or take decisive steps to unify as a single global power.
Draghi contended that Europe is currently squeezed between a United States aggressive on tariffs and a China willing to exploit its dominance over global supply chains.
"This is a future in which Europe risks becoming subordinated, divided, and deindustrialised — at once," he cautioned, adding that a Europe unable to defend its strategic interests would ultimately fail to preserve its values.
Notably, Draghi observed that the current US administration has made it "clear" that it views "European political fragmentation as serving its interests."
To avert this decline, he asserted that the EU must diversify its trade relationships and evolve from a loose confederation into a true federation.
"Where Europe has federated — on trade, on competition, on the single market, on monetary policy — we are respected as a power and negotiate as one," he stated.
"Where we have not — on defence, on industrial policy, on foreign affairs — we are treated as a loose assembly of middle-sized states."
He acknowledged that integration might proceed at different speeds but insisted it is necessary for survival in a "now defunct global order."
"We are all in the same position of vulnerability, whether we see it yet or not," Draghi said. "The old divisions that paralysed us have been overtaken by a common threat."
Draghi, who authored a landmark 2024 report on the EU economy containing hundreds of recommendations—few of which have been implemented—is scheduled to join an informal gathering of European leaders in Alden on February 12 to discuss competitiveness.