MNI BRIEF: EU Exposure To Global Trade Break "High" - Draghi

MNI (LONDON) - The EU has a high exposure to any “sudden stops” in global trade caused by geopolitical conflagration, the Draghi Report says, with over 40% of imports from a small number of countries not strategically aligned although current risks of a breakdown are low.

That, along with increased energy security, higher spending on defence, are growing challenges for the EU and member states in terms of cost, resources and political capital, the report published Monday says.  (see MNI INTERVIEW: US Election Key To EU Defence Boost Plans)

On trade, Draghi says there is only limited evidence currently of deglobalisation, with a rapid decoupling appears unlikely, with both China and the EU – two of the main trading blocs – having an incentive to accelerate the process. China trade concerns could, though, be both import and export-driven, the report notes

Draghi says the EU should move towards regular issuance of common safe assets to enable joint investment projects among Member States and to help integrate capital markets, building on the model of NGEU.To meet the objectives laid out in this report, "a minimum annual additional investment of EUR 750 to 800 billion is needed".