Mario Draghi has demanded a “new industrial strategy for Europe”, calling on the EU to raise investments by €800bn a year to fund radical and rapid reform to stop the union falling behind the US and China.

As well as backing a wholesale overhaul of how the EU raises investment funding, including “new common funding and common assets”, the former Italian premier’s highly anticipated report commissioned by the EU calls for Brussels to drive forward a significant reorientation of economic policy.

Key recommendations include relaxing competition rules to enable market consolidation in sectors such as telecoms; integration of capital markets by centralising market supervision; greater use of joint procurement in the defence sector; and a new trade agenda to increase the EU’s economic independence.