The European Union is facing a final opportunity to take the steps required to allow it to compete effectively with the United States, China and other rivals, the author of a much-anticipated report for EU leaders said on Wednesday.
Former Italian Prime Minister Enrico Letta is due to summarise his 147-page report to the leaders at a summit on Thursday and said they could not simply consign it to a drawer and hope for the best.
"The stalling that is taking place is at such as level that we cannot afford to wait. It is relative to the United States mainly, but also compared with the other large economies," he told a news conference with European Council President Charles Michel, who chairs summits.
"It means this is a last opportunity and last window that is open and we need to seize this opportunity," he continued.
Letta's report is wide-ranging, but centres on the idea that geopolitical tensions and a rise of protectionism threaten Europe's economic security and that scale is key in the push into new green and digital technologies.
There is general consensus that the EU single market functions well for the exchange of goods, but less well for intangibles. Letta's report highlights a need to remove barriers in the way of services.
It also says the exclusion of finance, electronic communications and energy now serve as a "major brake" on growth and innovation.
Letta said the greatest overall impact could come from steering the 33 trillion euros ($35.12 trillion) of private savings to the real economy. Now about a third of it is held in current accounts.
Letta said the 300 billion euros of family savings heading overseas, principally to the United States, highlighted the deficiencies of the EU's fragmented markets.
"The integration of the single market in financial markets could prove a game changer," he said. "The major issue is how to mobilise the savings of Europeans and ensure... the transition goes ahead well and with the necessary finances."
The European Commission has said that additional investments of 620 billion euros per year are needed for the green and digital transitions.
Letta's report said that applying existing rules on goods and services could unlock up to 700 billion euros of efficiency gains by 2030.
($1 = 0.9397 euro)
