Draghi immediately undercuts need for joint debt instrument to boost Europe

By Steve Goldstein

Former European Central Bank President Mario Draghi on Monday laid out his vision for Europe to bolster what he called a "stuck" economy. But he immediately backtracked on the need for a joint instrument to fund eurozone growth at his introductory press conference unveiling his plan to revitalize Europe.

"Common debt is instrumental," he said. "The case for a safe common asset, first and foremost it helps financing common projects, projects that are fundamental for raising productivity in Europe," Draghi said.

"Common asset will allow for complete capital market union, it will make things infinitely easier," he added.

But he sounded receptive to Europe avoiding that thorny issue. "If you find other ways, and you find politically it's easier, why not," he said.

"The common safe asset, in this asset, is not the objective per se but it's an instrument," he said.

Earlier, European Commission President Ursula von der Leyen similarly was equivocal on backing the idea of joint debt. She said it was an option along with the present funding formula of national contributions.

Draghi's plan for EUR800 billion ($883 billion) in spending is meant to unlock what he called a stuck economy. Since 2008, 30% of unicorns - startups with a valuation of $1 billion - that had started in the European Union have left and gone to the U.S., Draghi says.

"The problem is not that we lack smart people, and we don't lack good ideas. But there are too many barriers to commercializing innovations and scaling the map in the European Union," he said.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-09-24 0639ET

Copyright (c) 2024 Dow Jones & Company, Inc.