Listen: Von der Leyen or Draghi: Europe’s power and future under question

Over the weekend, European Commission President Ursula von der Leyen stepped in to defend the EU- US tariff deal, after sharp criticism from Mario Draghi, economist, former ECB chief and former Italian prime minister who, just last year, was asked by von der Leyen to compile a report with ideas to ramp up the EU's economic growth.

So, is the tariff deal a smart compromise, or proof of Europe’s weakening influence?

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Long Story Short” hosted by Evi Kiorri. The podcast is available on all major platforms.

You can find the transcript here if you prefer reading:

So, a lot happened this summer! During our break we saw Trump and Putin meet. Then, European leaders travelled to Washington to meet with the US president, who proudly hailed the new trade deal between the EU and the US. But precisely on that the grass doesn’t look as green as painted.

Over the weekend, European Commission President Ursula von der Leyen stepped in to defend that tariff deal, after sharp criticism from Mario Draghi, the former ECB chief and former Italian prime minister who, just last year, was asked by von der Leyen to compile a report with ideas to ramp up the EU's economic growth. So, is the tariff deal a smart compromise, or proof of Europe’s weakening influence?
Welcome to Long Story Short, Europod’s daily podcast that breaks down what matters most, in just five minutes. I’m Evi Kiorri, here to make Europe’s latest, long story… short.

Fast forward to this weekend and in an op-ed published across several European newspapers, VDL defended the EU-US tariff deal, calling it a “conscious decision” that helped avoid a trade war. According to von der Leyen, if the two biggest democratic economies had failed to reach an agreement, the only ones celebrating would have been Moscow and Beijing.

Von der Leyen called the deal “good, if not perfect,” noting that tariffs are just taxes that raise costs and cut competitiveness. She also pointed to the EU’s wider trade push, with new deals sealed with Mexico, Mercosur, Switzerland, and the UK, talks concluded with Indonesia, and negotiations with India expected to finish this year.

She also called for a strong and independent Europe, urging completion of the single market and improvements in competitiveness and sustainability.

Mario Draghi, however, took a very different line at the Rimini Meeting in Italy. He warned that Europe’s belief in its economic size as a source of geopolitical power has “evaporated.” In his words, 2024 will be remembered as the year this illusion disappeared.

He pointed to several examples: Europe had to accept tariffs from the United States, its largest trading partner. It was pressured by the same ally to increase military spending, something it may have needed to do anyway, but it happened in ways that don’t necessarily serve Europe’s interests.

Draghi argued that despite being one of Ukraine’s main supporters, the EU has played only a marginal role in peace efforts and in Gaza, Europe was just “an observer”.

He highlighted deep inefficiencies within the EU itself. According to the IMF, if internal barriers in the single market were reduced to US levels, EU labour productivity could be 7 percent higher after seven years. Yet those barriers persist, which leads to slower tenders, higher costs, and greater reliance on suppliers from outside the EU.

Now, Von der Leyen and Draghi are offering two very different pictures of Europe’s place in the world. For von der Leyen, the tariff deal shows pragmatism: imperfect compromises that keep trade flowing and avoid conflict. For Draghi, it is proof that Europe is being sidelined by allies, undermined by rivals, and held back by its own internal barriers.

And for us Europeans, these aren’t abstract arguments. They affect competitiveness, the price of goods, defence spending, and Europe’s ability to act as a global player rather than a spectator.

So, looking ahead, the EU faces two tracks. On one side, von der Leyen’s focus: completing the single market, signing more trade agreements abroad, and calling for independence and competitiveness. On the other side, Draghi’s more radical vision: tearing down internal barriers, pooling resources through common debt, and building the industrial and technological capacity to keep pace with the United States and China.

Both acknowledge that the EU’s old assumption, that economic size alone equals geopolitical power, no longer holds. The challenge now is whether Europe can adapt fast enough to a world where tariffs, security, and technology define global power.

But that’s all for today on Long Story Short, a podcast by Europod in partnership with the Sphera Network. You can also find us on the EUobserver website, go check it out. Thanks for listening. I’m Evi Kiorri, and I’ll be back tomorrow at 12:30 with more insights in just five minutes.

See you then!