Good morning,
Draghi (‘Super Mario’) wants more European champions.
Another Airbus? Another Northvolt? An AI gigafactory? No matter. As long as it's big.
He castigated EU policymakers for not updating merger rules to let cross-border champions form in priority sectors like batteries or artificial intelligence, and compete with US and Chinese giants.
"A review of merger guidelines is underway, but industry cannot wait until 2027… innovation must be built into competition policy now,” Draghi said at an event on Tuesday marking the one-year anniversary of his own report.
The backdrop is ongoing friction between EU Commission president Ursula von der Leyen, who wants merger reform now, and socialist anti-trust chief Teresa Ribera, who is still testing the waters (but seems rather reluctant).
Draghi pointed to Rapidus, Japan’s €12bn gamble on 2nm chips, as a model for Europe ‘to learn from’. Production is set to start in 2027, but the target is ambitious, and it’s still uncertain whether Japan’s gamble will pay off.
It might. Japan has been a chip giant before. But as a guide for EU industrial policy, it sounded risky—more Northvolt, the €15bn battery failure, than Airbus, the ur-European champion.
It could also misread how innovation happens elsewhere. Heavily subsidised by the state, BYD only became China’s EV champ after Tesla set up in Shanghai in 2019. The Chinese business community even has a verb for it: “catfishing” – bringing a powerful new creature into the pond to force local firms to swim faster.
That’s not the whole story. Tesla’s investments in China’s industrial base laid the groundwork BYD could later exploit—much like Apple’s €275bn bet in China helped grow the country’s tech sector.
What does it mean for Europe? Perhaps, instead of betting billions on European champions, it’s time to let in some catfish of our own.
- Wester van Gaal, economics editor
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