Mario Draghi, former President of the European Central Bank and former Prime Minister of Italy, has once again put Europe’s economy under the spotlight. Speaking at the Rimini Meeting, he delivered a blunt message, stating that Europe can no longer rely on size alone to secure influence in the world.For too long, the EU has believed that a market of 450 million consumers was enough to guarantee power. But as Draghi pointed out, recent years have exposed the flaws in that thinking. Europe has found itself responding to American tariffs, scrambling to boost defence spending on other people’s terms and sidelined in major international crises.His solution is bold but necessary: Europe must transform itself from within. That means tearing down barriers to productivity – cutting red tape and freeing businesses to grow. Draghi calculates that if the EU matched the United States in efficiency, productivity could rise by 7% within seven years.He also calls for collective European investment, backed by shared borrowing. The logic is simple, no single country can compete in areas like defence, green energy or artificial intelligence. But together, Europe can.Why does this matter for Malta?–Opportunities for growth – Fewer barriers inside the single market would allow Maltese businesses, from tech start-ups to exporters, to reach more customers without added costs.–Access to investment – Shared EU funds in green energy, digital infrastructure and research could give Malta access to projects far larger than we could ever finance alone.–Financial Services – Malta’s economy depends on financial services and a competitive regulatory framework. A more harmonised EU approach in banking, digital finance and capital markets could bring both challenges and opportunities, but if the EU adopts an approach of overregulation this is bound to make it uncompetitive vis-à-vis more flexible jurisdictions.Regulations need to be applied proportionally, so smaller economies like Malta are not unduly burdened.Furthermore, total harmonisation which applies a one-size-fits-all approach throughout the EU risks stifling innovation, which is one of the key strengths of smaller Member States. At the same time, an element of closer integration would attract cross-border investment and allow Maltese firms to grow across Europe.–Geopolitical strength – A more unified Europe gives Malta more stability and a stronger voice on the global stage.-Job creation and skills – Draghi’s focus on investment and productivity could directly benefit Malta’s workforce.By embracing new technologies, green energy projects and digital innovation, Malta can create high-quality jobs for young people and develop skills that match the global economy. This is essential if our youth are to compete internationally and avoid being left behind.One year on from Draghi’s landmark report on European competitiveness, little concrete progress has been made at the EU level.The gap between rhetoric and action remains wide, even as global competition intensifies. For Malta and for Europe as a whole, the message is clear, the time for discussion has passed. If we are to secure prosperity, resilience and influence in the years ahead, we must act now to transform our economies.Cover photo: Mario Draghi (Credit: European Central Bank)Jerome Caruana Cilia is a PN MP and the Shadow Minister for the Economy and Enterprise.•