Mario Draghi has sounded a clarion call regarding the future of the European Union, arguing that the bloc risks becoming simultaneously subjugated, divided, and deindustrialized unless it moves toward deeper integration and transforms into a "genuine federation." Speaking at the Belgian university KU Leuven, where he was awarded an honorary doctorate, the former Italian Prime Minister and former President of the European Central Bank contended that the current international system has collapsed and that Europe must respond with institutional and political deepening. "Power requires Europe to move from a confederation to a federation," Draghi emphasized, noting that the global order is "now inactive."
The collapse of the global order
In his address, Mario Draghi attributed the beginning of the global system's deconstruction to China's entry into the World Trade Organization and the West's decision to bolster trade with a state that "had ambitions to evolve into a separate pole of power." This development, he said, paved the way for the political backlash we are experiencing today and led to "a world with less trade and weaker rules"—a reality that is painful but not inherently threatening on its own. "The threat is what follows it," he underlined, referring to the stance of the United States. As he noted, the US is imposing tariffs on Europe, threatening European territorial interests, and—for the first time—making it clear that it views Europe's political fragmentation as an element that serves its own interests.
Pressure from China and the EU's weak points
At the same time, Draghi noted that China continues to control critical nodes of global supply chains and is willing to leverage this power, "flooding markets, restricting critical inputs, and passing the cost of its own imbalances onto others." In this environment, the European Union, according to him, cannot rely simply on a collection of small states. "The grouping of small countries does not automatically create a strong geopolitical player," he warned.
‘Pragmatic federalism’
Mario Draghi argued that where Europe has already federalized—in trade, competition, the single market, and monetary policy—"it is respected as a power and can negotiate as one." As an example, he cited recent trade agreements with India and Latin American countries. Conversely, in sectors such as defense, industrial policy, and foreign policy, the EU is treated "as a loose union of middle-sized states, vulnerable to division and fragmentation." The solution, he stated, is a "pragmatic federalism" that will break the current stalemate without subjugating member states. The model he described envisions voluntary participation, with an open door for those who wish to join, but not for those who undermine the common goal. He cited the Euro as a successful example, reminding the audience that some states participated from the start while others joined later.
Europe's dilemma
In closing, Mario Draghi posed the central strategic question for the future of the EU: "Europeans are the only ones, among those caught between the US and China, who have the potential to become a real power themselves. The question is whether we will remain merely a large market, subject to the priorities of others, or if we will take the necessary steps to become a single power." "A Europe that cannot defend its interests," he concluded, "will not be able to maintain its values for long."
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