Back in Brussels, many were nodding in agreement. After all, European growth has been tepid in the past decade, particularly compared to the US and China. In our own Fortune 500 Global list, which ranks companies by revenue, the number of European companies fell back from 142 in 2004 to 98 in 2024. And almost no new tech or industrial giants have emerged out of Europe in that time.
Yet it wasn’t Dimon’s analysis, but that from another one-time banker, former European Central Bank president Mario Draghi, a year earlier, that made competitiveness such a hot issue. Notably, he put energy at the center of it.
Horacio Villalobos#Corbis/Getty Images
Alongside recommending a greater focus on innovation, security and economic independence, Draghi explicitly linked the continent’s commitment to decarbonization with the competitiveness of its economies.
“Without a plan to transfer the benefits of decarbonization to end-users, energy prices will continue to weigh on growth. The global decarbonization drive is also a growth opportunity for EU industry… yet it is not guaranteed that Europe will seize this opportunity,” wrote Draghi, who minted his reputation in European politics with his “whatever it takes” approach to saving the euro in the global financial crisis.
His message wasn’t that different from similar, previous reports that were quickly forgotten. After all, European industrial electricity prices can be 2-4 times higher than in the U.S., and with the exception of a few smaller countries, energy costs throughout the continent are higher than elsewhere in the industrialized world.
But the economic and geopolitical context in which Draghi delivered his message meant that this time it carried a heightened sense of urgency.
“Europe built its economic model around access to cheap energy from Russia, export markets in China, and security guarantees from the U.S., and none of these things are there anymore. That was the underlying message from Draghi,” Simone Tagliapietra, a senior fellow at the Brussels-based Bruegel think tank, says.
Whether Draghi ever made his analysis so explicitly about Europe’s adversaries and allies isn’t clear: his office declined to comment on the matter when I reached out. But the idea that Europe’s economic competitiveness could only improve if it becomes energy independent, is a key consideration of President von der Leyen’s new European Commission, which started its term less than a year ago.
“The Draghi report is the foundation of the European consensus on the new economic context that must be built at the European level for the next five years,” Stéphane Séjourné, the French Executive Vice President of the European Commission, in charge of the bloc’s industrial agenda, says. “There has truly been a change in approach on these issues… decarbonization is not just a climate plan, it is an economic strategy.”
“Europe built its economic model around access to cheap energy from Russia, export markets in China, and security guarantees from the U.S., and none of these things are there anymore. That was the underlying message from Draghi.”Simone Tagliapietra, a senior fellow at the Brussels-based Bruegel think tank
There is broad support beyond politics too. The link between Europe’s energy independence, decarbonization and industrialization plans was one of the main agenda items in a meeting between the European Commission and 60 business leaders, including the leaders of SAP and IKEA, this past June in Brussels.
“Russia won’t come back,” Christian Klein, CEO of SAP, Europe’s largest tech company, told me following that meeting. “So we should rather invest in infrastructure and the grid to have access to other sources of energy.”
Jesper Brodin, the CEO of Ingka (IKEA) agreed: “The hard-learned lesson of Russia’s invasion of Ukraine, and what it meant, is that there is a very strong majority in all camps for European energy independence.”
Making the change
But how can Europe even begin to turn this tide, even if the sense of urgency is real? All of Europe’s economic indicators are still blinking yellow or red, and national budgets are increasingly constrained by recent commitments to invest massively more in defense.
“The fundamental problem is that Europe imports all the fossil fuels it needs,” Tagliapietra said. “Europe is trapped.”
To give an idea, the North Sea, which 25 years ago produced 4.4 million barrels of oil equivalent a day, now produces around 1 million, a figure that is still dropping. The EU alone consumes over 10 million a day, even as it pushes to wean itself off hydrocarbons from Russia, which was its primary long-term supplier.
Faced with this stark reality, Europe wants to generate more homegrown energy, more energy from electricity, and more links between countries’ electricity grids. It’s hardly a small challenge, as electricity (including solar and wind) still only supplies 23% of Europe’s energy needs. But this time Europe is serious about improving and greening the grid.
“Russia won’t come back. So we should rather invest in infrastructure and the grid to have access to other sources of energy.” Christian Klein, CEO of SAP
Séjourné told me of his plans to advance the “single market”, as one key aspect. He plans to introduce a so-called “28th regime”, for example, so companies can operate all over Europe without having to establish separate entities in each market. (Europe has 27 member states, hence the notion of a 28th regime.)
There are other reforms that could help too, including Draghi’s suggestions of improving or reducing Europe’s “inconsistent and restrictive regulations”.
The goal is ultimately to incentivize the development of all types of European-produced energy, such as wind and solar, in a more coordinated way—and with more focus on speed of execution, compared to the country-by-country, slow, and highly bureaucratic ways of the past.
“Europe wants to go to a world where governments are not planning their energy strategies at the national level only, but… in a way that is fully coordinated with other European countries,” Tagliapietra said.
Will political commitment be enough for the continent to power its future, and enhance its competitiveness on the global stage? Do the continent’s leaders have the capabilities for reform to match their intent? What role will business play? In the remaining articles in this series, we plan to find out.
