Europe must do mea culpa because “it has successfully imposed duties on itself”. Are the words of Mario Draghi, who wrote an editorial on Financial Times in which he criticized the latest EU moves, proposing a change based on a proactive use of the tax policy. Let’s see in detail what the former Prime Minister and the prospects on the possible duties imposed by the United States said.
Draghi’s proposal for change
Europe is called to reflect on its latest moves, since, as Draghi says in an editorial released on Financial Timeswould have “concentrated too much on individual or national objectives without calculating its collective cost”. The former prime minister and already president of the European Central Bank underlined the urgency of a radical change based a more active approach in tax policies and the removal of internal barriers, in order to stimulate theinnovation and decrease the dependence on exports.
Draghi stated that a more proactive use of tax policy, through an increase in productive investmentscould help reduce commercial surplus and send a strong signal to companies to encourage more investments in research and development.
The rates imposed by the United States
The analysis provided by Draghi highlights how the recent weeks have represented a severe reminder of the fragility that characterize Europe. At the end of last year, the Eurozona recorded minimal growth, thus highlighting the weakness of the internal recovery, while The United States They began to introduce rates against their main commercial partners.
According to a recent analysis of the Prometheia consultancy and economic research company, with Trump’s protectionist policies, Italian companies could lose up to 9 billion dollars. A worrying scenario if we consider that the United States represent the second market for Italy after Germany. An increase in duties, according to the analysis, would determine an aggravation up to 7.20 billion dollars, which would be added to the already existing duties, which in 2023 amounted to almost 2 billion dollars.
According to the governor of the Bank of Italy, Fabio Panetta, However, the duties would also damage those who want to impose them. Estimates talking about beyond Two points of GDP In the United States, while for the euro area the consequences would be more contained, around half a percentage point, with greater effects for Germany and Italydue to the relevance of their exchanges with the USA.
Panetta claimed that an increase in US commercial policies on European exports should have no significant effects on inflation. “The duties could generate rise to rise related to a depreciation of the euro compared to the dollar and any retaliation measures by the EU. However, these effects would be compensated by a slowdown in the global economy and the hijacking towards the European markets of Chinese goods affected by high duties “.
The factors that have put the EU in crisis
But what are the two factors that led Europe in this difficult situation according to Dragons? The former president of the European Central Bank points the finger at “the long -standing inability of the EU to face its supply constraints, in particular its high internal barriers and regulatory obstacles, much more harmful to the growth of any tariff that the United States could impose “, while the second is linked to the brake on the growth of Technological companies for the effect of regulation.
It would have been the inability of Europe to break down internal barriers to contribute to an intense commercial opening, According to Draghi. While the internal restrictions remained high, paradoxically the external ones have reduced due to globalization.
