Before Mario Draghi lectures Europe on what to do next, he must face the damage his own policies left behind.
The man behind the famous "Draghi report" on competitiveness is the same man who, as president of the European Central Bank, famously promised to do “whatever it takes” to save the euro.
So time has come for an honest accounting of what was the cost of that promise.
After the 2008 crisis, the ECB did what any central bank would: cut interest rates to zero.
But lowering rates to zero, and later even below, did not bring Europe back to growth. Why? Because confidence, not just cheap credit, is the engine of an economy. Debt at 0% is still debt. Without the prospect of future jobs, income, or opportunity, households will not borrow and businesses will not invest, no matter how low rates go.
So when that failed, Draghi and the ECB tried something new called Quantitative Easing. A sophisticated name for something simple: money printing. Not with paper, but digitally. Then pumping that new money into the financial system.
From 2011 to 2019 — except for just two years — pursued this policy, creating vast amounts of new money in one form or another.
But no matter what they tell you, money printing is never harmless. It always distorts the economy long term. It means:
- Inflation. Inflation is always and everywhere a monetary phenomenon. More money chasing the same goods and services will eventually push prices up.
- Asset bubbles. New money hunts “safe havens” — real estate, shares, infrastructure. Prices rise far above value, locking out many from housing and ownership and fueling instability.
- Malinvestment. Projects that would never be profitable under normal conditions suddenly look attractive. Capital and labor are wasted on ventures that cannot stand on their own once rates normalize.
- Zombification. Weak firms that should have gone bankrupt are kept alive by infinite credit. Instead of creative destruction freeing resources for better uses, Draghi froze Europe in a low-growth trap. Zombie firms survive not by innovation or competitiveness, but because money was free. They block new companies, drag down wages, and keep productivity stagnant.
Mario Draghi is not a savior of Europe. He is the architect of the malaise our economy suffers today.
Yet instead of admitting the damage, he now calls for a massive, centrally planned industrial policy in the name of “European competitiveness.” What he proposes is more intervention, more technocracy and more government “winner-picking.”
That is not competition. That is central planning. In the URSS it was called Gosplan.
And here is the most worrying part: look at the euro bills in your wallet. Many are signed by Draghi himself.
Remember, the euro is fiat money. It is not backed by gold or anything tangible. It relies entirely on trust.
So, if we find out we can no longer trust the man whose signature is on our own money, how long do you think trust in the euro can last?
