A looming threat hovers over the European economy, Mario Draghi warns. The former president of the European Central Bank fears that the bloc’s economy could slip into a "slow agony," calling on authorities to take immediate action to prevent such a dire outcome.

Draghi stressed that European leaders should implement a comprehensive set of measures to boost economic growth and stabilize the region. In a report presented to the European Commission, the former ECB chief assessed the competitiveness of EU countries and expressed the need for quick decisions to keep pace economically with rivals. "It's 'Do this' or it's a slow agony," Draghi warned.

According to Draghi, Europe could face an "existential challenge" by 2040 as its workforce is projected to shrink by 2 million people annually. This will require a significant boost in productivity across EU member states. Achieving such a scenario, however, is far from easy. Ultimately, European countries will have to make a choice. "We will not be able to become, at once, a leader in new technologies, a beacon of climate responsibility, and an independent player on the world stage," Draghi added. He noted that natural gas prices in Europe are currently four to five times higher than in the United States, and electricity costs are two to three times greater. In this environment, Europe lacks the resources for sustained growth, which has led to a marked slowdown in the region's economic momentum.

From April to June 2024, the euro area's GDP grew by just 0.2% quarter-on-quarter, down from 0.3% in the prior period and slower than the increase seen in the fourth quarter of 2023. Meanwhile, markets are now expecting rate cuts from the European Central Bank. With inflation stabilizing, investors and analysts are counting on further monetary policy easing by the regulator to support the region’s fragile recovery.