In an extended interview with Bloomberg at the Citadel Future of Global Markets Conference, previous Italian Prime Minister and ex-European Central Bank Chief said that arbitrary action has become the rule, and not the exception in today’s world. The European technocrat was speaking on the actions conducted by global powers and referred to President Donald Trump’s tariffs as an example. He said that once these tariffs have been rolled-out unilaterally, current and future leaders will find it easier than before to do the same.
Mario Draghi said that the world used to be run by a set of rules and customs which were enforced with a “US soft-touch”. He said that this era is over and it will probably won’t come back. Apart from losing the guarantee of international rules, Draghi also added that the US is no longer the global leader of the world order and that new blocks are emerging. However, he added that it is not clear yet how these blocks will emerge but said that China is already way ahead of everyone else in become a global power.
On China, Draghi said that China currently has a lot of structural economic risks while it dwells in a transition about its relationship with the US. He described the difficulty in stabilising this relationship due to the fact that both powers were never consenting to other global powers unlike European powers before the First World War. He added that China and the West are interdependent and is skeptical of the possibility of complete decoupling and independence from China.
Questioned on what he thinks about the growing US debt, Draghi said that “Productivity growth will define the fiscal space in both continents: Europe and the US.” He reiterated that debt can be addressed with productivity and highlighted on the potential spillover of growth that may take place in high-tech.
Mario Draghi is very optimistic about the AI-boom and equated it with the discovery of electricity, saying that it will change the life of most people.
He concluded by repeating that the world is changing more intensely and at a staggering pace. As long-standing customs and rules are sidelined, strength is becoming an ever more vital quality to uphold, he said.
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