"If one objects to building a true Single Market, to capital market integration, and objects to debt issuance, one objects to our EU objectives." Mario Draghi said that on 17 September 2024, presenting his report on European competitiveness to the European Parliament in Strasbourg. It is the closest thing the report has to a litmus test: three ideas, one yes-or-no question for every government.
Two years later, the scorecard says the EU is not passing it quickly.
EPIC's Draghi Implementation Index (draghiwatch.eu) tracks how many of the report's 383 recommendations have become binding EU law. Its January 2026 interim audit counted 15.1% as strictly implemented (58 of 383) and 38.9% once partial implementation is included (149 of 383). The July 2026 preliminary update raised those figures to 15.7% strictly (60 of 383) and 41.3% including partial (158 of 383).
The pace has slowed. EPIC reports that strict-plus-partial implementation rose 7.5 percentage points between September 2025 and January 2026, but only 2.4 points in the February to June 2026 half-year.
EPIC's analysis offers a pattern. The EU moves fastest where competitiveness fuses with security. In the January 2026 audit, defence jumped from 35.7% to 78.6%. It moves slowest on structural reforms that force market outcomes, and EPIC names the Single Market and capital markets among the weakest areas on delivery. Those are exactly the first two items in Draghi's litmus test.
EPIC's July 2026 report, The Cost of Single Market Fragmentation, explains why the incentives point that way. It argues that the benefits of integration are "diffuse, cross-border and long-term", while the benefits of national protection are local, immediate and politically organised. Its evidence is stark: local firms remain more than 900 times more likely to win public contracts than foreign bidders, according to research by Herz and Varela-Irimia in 2020. Legal integration, the report says, is not market integration.
There are signs of movement. Negotiators have reportedly reached a preliminary accord this week to cut capital charges on the safest securitisations by as much as half, a measure aimed at freeing bank balance sheets for investment. It is one concrete step on the capital markets agenda. It is also the kind of technical, incremental progress the Index would score as partial rather than strict.
Draghi's litmus test has not been failed outright, but it has not been passed either. The EU delivers on the parts of his agenda that governments already want for security reasons. It stalls where delivery would mean giving up national protection or sharing risk. EPIC's next full review of the Index will show whether the slowdown seen in the July update was a pause or a trend. The test it will apply is the one Draghi set two years ago.
