Former Italian premier Mario Draghi warned Tuesday that the European Union’s sovereignty is at risk because of its failure to act.

Speaking at a high-level conference in Brussels, Draghi said the bloc’s economic model is weakening.

“One year on, Europe is in a more difficult situation,” Draghi said. “Our growth model is fading. Vulnerabilities are increasing and there is no clear path to finance the investments we need.”

He added that inaction now threatens both competitiveness and sovereignty. Citizens and businesses, he said, understand the challenges and priorities but are frustrated by delays.

“They see us as incapable of keeping pace with the speed of change elsewhere,” Draghi noted. “They are ready to act, but they fear governments have failed to grasp the gravity of the situation.”

Draghi also questioned the EU’s 2035 target to phase out petrol and diesel cars. The imagined “virtuous circle” of investment and adoption in electric vehicles has not happened, he said.

He pointed to the recent EU-US tariff deal, describing it as largely shaped by Washington’s terms.

Draghi repeated his call for the EU to issue joint debt to fund the massive investments needed for energy transition, technology, and defence.