FRANKFURT Rebuilding Europe after the coronavirus pandemic will be akin to the post-World War II reconstruction effort and the bloc must reaffirm its core values despite challenges from global powers, former European Central Bank President Mario Draghi said.
The pandemic risked the destruction of human capital not seen since the war so reconstruction should focus on the people who must pay off the unprecedented amount of debt amassed this year, Draghi said in a lecture in Rimini, Italy.
Moreover, even as Europe transforms it must recommit to some of its key principles, including multilateralism and the global rule of law, even as powers such as the United States and China question these principles, Draghi added.
“We should take inspiration from those who were involved in rebuilding the world, Europe and Italy after World War II,” said Draghi, who has spoken rarely since leaving the ECB late last year.
“The debt created by the pandemic is unprecedented and will have to be repaid mainly by those who are young today,” Draghi said. “It is therefore our duty to equip them with the means to service that debt.”
Draghi said low rates did not automatically make debt sustainable and that the funds must be used for productive purposes, including investing in human capital, productive infrastructure and research.
He said spending should also reflect society’s changing preferences, including towards environmental protection, better health care and digitalisation, since remote working was bound to gain prominence.
“However, there is a sector which is critical for growth and therefore for all the transformations I have just listed, and where a long-term vision must be married with immediate action: education and, more generally, investment in young people,” he said.
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