EU risks becoming ‘sick man of the world’ without rapid reform, Mike Peacock says
EWG•The EU had fully delivered only 15.7% of Mario Draghi’s reform proposals by July, with about 40% partially tackled, and set an end-2027 deadline for key measures. Only 3% of the most significant proposals, including single capital and energy markets, had been legislated for, according to cited research.
1. Reform progress lags
The European Union risks long-term decline if it fails to carry out reforms proposed by former European Central Bank chief Mario Draghi, Mike Peacock wrote. The bloc’s end-2027 goals include completing its single market, creating capital and energy unions, increasing common borrowing and reducing unanimity requirements for major reforms. By July, the EU had fully delivered 15.7% of the proposals and partly addressed about 40%, the European Policy Innovation Council said; a separate analysis found legislation covered just 3% of the most radical measures.
2. Elections complicate plans
Peacock wrote that upcoming elections could make reform harder, as governments facing voters may resist giving up sovereignty. France votes in April, Spain has called an early election for November 29, and Italy and Poland are due to hold votes later in 2027. In Germany, rising support for the AfD could slow reforms, while Chancellor Friedrich Merz’s government has loosened the debt brake to enable higher defense spending and a €500 billion infrastructure fund.
3. Economic stakes
European Commission President Ursula von der Leyen called for an acceleration of projects in Europe’s strategic interests. Peacock highlighted savings and investment and energy unions as key tests, noting that a single capital market could mobilize €35 trillion in household savings. The IMF estimated the reform agenda could lift European productivity by 20% over a decade, while the ECB estimated rapid AI adoption could raise EU productivity by up to 4% over a decade.
