Italy stands out among the economies most affected by recent shocks, with gas imports accounting for about 40 percent of its consumption and a sizable share coming from Russia. Prime Minister Mario Draghi described this dependence as economically reckless and geopolitically perilous, stressing the need to curb energy costs and the daily payments that flow to Moscow. In pursuit of that goal, the European Union has discussed measures such as capping gas prices and sharing debt to help finance the energy crisis, intensified by Russia’s war in Ukraine and linked to efforts toward EU accession for some neighboring partners.
Draghi noted that Russia sells roughly two thirds of its natural gas to Europe, primarily through pipelines that limit alternative buyers. He argued that a practical proposal could reduce the heavy costs pressing European economies and simultaneously cut the funds sent to President Putin, which help finance military actions. This viewpoint was voiced during a session in Strasbourg where the European Parliament demonstrated solidarity across member states, including in the energy sector, with the sanctions the EU continues to uphold against Russia. Draghi emphasized continued support for these sanctions and for a future where they remain essential tools of policy, scrutiny, and collective resilience.
On electricity pricing, Draghi urged structural changes to decouple gas prices from electricity costs, echoing approaches discussed by other major European players. He described the current price gap as disproportionate and warned that, if the energy mix stays biased toward fossil fuels, the gap could widen. Immediate, decisive steps were advocated to sever the gas-electricity link, a move he views as crucial for the broader welfare of European citizens and a stronger, more transparent energy market.
war costs
Beyond price reforms, Draghi highlighted the broader fiscal pressures caused by the war in Ukraine, noting that Europe faces substantial spending needs that no single national budget can absorb alone. He warned that costs affect different income groups in uneven ways and require targeted compensatory measures. He underscored that Europe must protect social stability while maintaining sanctions leverage, especially in countries with deeper historical ties to Russian energy supplies. The European Union has already crafted tools designed to manage these challenges and support households through turbulent times.
One example is the use of risk-sharing mechanisms that can stabilize labor markets during shocks without relying solely on immediate subsidies. Draghi suggested that credit-based instruments could avoid crowding out public funds and reduce reliance on volatile market debt, particularly for fiscally fragile economies at times of rising borrowing costs. Such tools could broaden the scope of timely support while keeping financial stability in view for EU member states.
In practical terms, Draghi promoted expanding the reach of Europe-wide response measures and ensuring they come with safeguards to prevent financial stress. He proposed widening the palette of temporary supports, including measures to preserve household purchasing power through targeted tax relief where appropriate. He also noted that long-term investments in defense, energy transition, and food and industrial security should be funded in part through Next Generation EU programs, aligning immediate relief with strategic resilience.
“Pragmatic Federalism”
In his remarks, Draghi called for swifter European integration and reform, arguing that the existing institutions, while useful, no longer fully reflect current realities. He urged the union to equip itself with what he described as pragmatic federalism—an approach that would bring together policies across economy, energy, and security under a more unified framework. This would require rethinking decision-making rules, with a move away from unanimous consent toward qualified majority voting when appropriate. If such a path entails treaty revision, he urged leaders to pursue it with courage and clarity.
Draghi also recalled the importance of advancing membership negotiations with prospective entrants in the region, stressing the need for credible timelines and realistic expectations. He singled out candidate countries and neighbors, underscoring the value of restoring momentum in talks with Western Balkan partners and ensuring that legitimate aspirations are acknowledged. The broader aim is to sustain the integrity and dynamism of the European project as it adapts to new geopolitical and economic realities.