(Bloomberg) -- Former European Central Bank chief Mario Draghi said Sweden is an example for the European Union to emulate in its push for more productivity while retaining a robust safety net for the poor. 

Tasked with delivering a report this month on enhancing the bloc’s competitiveness, the one-time Italian premier listed several changes needed for the region to “grow faster and better” — and then highlighted the biggest Nordic economy in particular. 

“The example of Sweden – which has a tech sector that is more than twice as productive as the EU average – shows that a strong social model and technological progress are not only compatible, but also self-reinforcing when focused on retraining and skills,” Draghi said while receiving an award from Spanish King Felipe VI at a monastery in the west of the country.

Draghi’s report is seeking to develop a European industrial policy that can begin to transform the region’s destiny after decades when its productivity growth has notably lagged that of the US. In his speech on Friday, he insisted that any measures shouldn’t come at the cost of compromises for policies to support the bloc’s citizens.

“Maintaining high levels of social protection and redistribution is non-negotiable,” he said. “I want to restate that fighting social exclusion will be be fundamental not only for preserving the social equity values of our Union, but also to make our journey towards a more technological society successful.”

Sweden has long pioneered the Nordic model balancing being one of the world’s richest and most competitive economies with a strong safety net for poorer citizens. 

That system drew criticism in 2018 from advisers to former US President Donald Trump, who said then that the region proves how “socialism reduces living standards” and belongs in the same basket as Venezuela.

For all its advantages, Sweden’s economy is facing a rough patch. The European Commission sees it expanding just 0.2% this year — compared with 1% in the EU as a whole — and unemployment there was 8.4% in April, the third highest in the bloc. 

Upcoming Report

Draghi’s report will be around 400-pages long, half of them of economic analysis, significantly longer than the document drafted by Enrico Letta — another former Italian premier — for the EU leaders and released last April, a person familiar with the matter said.

Publication is expected during the third week of July, but could be postponed as some key parts — primarily the chapter on financing — are still under development, the person said, asking not to be identified because discussions are private.

Still, the report is expected to focus on mobilizing private resources through a deeper capital markets union in the bloc, the European Investment Bank and contemplate EU financing. 

The issue of more joint borrowing remains open. Draghi has supported this idea in the past, to partly finance the long list of EU priorities and challenges. They include clean technology and defense. 

Some member states including those in the south and the Baltics have increased calls for common debt to pay for this, but the commission remains reluctant. That shouldn’t impede Draghi as his role as special adviser grants him indepence. 

In contrast with Letta’s approach, Draghi decided not to tour EU capitals to prepare the report, although he and his team have been in contact with the leaders and governments that have reached out over the past months. Instead, he dedicated his preparatory work talking to economists and experts — including some Nobel laureates — and companies of all sizes and trade organizations, the person said.

--With assistance from Niclas Rolander.

(Updates with background on report starting in ninth paragrah)

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