Draghi urges radical European Union reform requiring extra 800 billion euros a year

The European Union needs up to 800 billion euros ($884 billion) in additional investment per year to meet its key competitiveness and climate targets, according to a report from economist and politician Mario Draghi.

The bloc's goals of bolstering its geopolitical relevance, social equality and decarbonization are being threatened by weak economic growth and productivity compared with the U.S. and China, the report states.

The wide-ranging study led by Draghi — who previously served as prime minister of Italy and president of the European Central Bank during the euro zone debt crisis — found EU priorities must include reducing energy prices, strengthening competitiveness, coordinating industrial policy and raising defense investment.

The EU must also adapt to a world where "dependencies are becoming vulnerabilities and it can no longer rely on others for its security," the report found, citing the EU's dependence on China for critical minerals, and China's reliance on the EU for absorbing its industrial overcapacity.

The EU's high level of trade openness will leave it exposed if trends toward supply chain autonomy accelerate, the report continues. Roughly 40% of Europe's imports come from a small number of suppliers which are difficult to replace, and around half of this volume originates from countries with which the bloc is not "strategically aligned," it says.

"The EU will need to develop a genuine "foreign economic policy" that coordinates preferential trade agreements and direct investment with resource-rich nations, the building up of stockpiles in selected critical areas, and the creation of industrial partnerships to secure the supply chain of key technologies," the report states.

The EU will need to ensure