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The EU must become a “federation” to avoid being “picked off one by one” by China and the US, Mario Draghi has warned, in a plea to the bloc’s member states to rapidly deepen integration in areas such as defence, industrial policy and foreign relations.

The former European Central Bank president, who has previously called for the bloc to embrace “pragmatic federalism”, said it was time for the EU to give up long-held resistance to pooling power because Washington and Beijing could abuse the dependencies created by globalisation.

“Power requires Europe to move from confederation to federation,” said Draghi, a former Italian prime minister, in a speech in Belgium. He added that the EU’s current model of a 27-state confederation with individual veto rights on key issues “does not produce power” but “a group of states . . . each vulnerable to being picked off one by one”.

“We are all in the same position of vulnerability, whether we see it yet or not,” he said. “The old divisions that paralysed us have been overtaken by a common threat. But threat alone will not sustain us. What began in fear must continue in hope.”

Trump’s desire to annex Greenland — an autonomous territory of Denmark, an EU and Nato member state — and his threat last month to impose tariffs on EU countries to gain control of the island shocked European capitals that have relied on the US security alliance for decades.

Europe is at the same time struggling to compete with China given the country’s dominance of supply chains in key critical minerals and green technology and its heavily subsidised export model.

EU member states have transferred some powers to the European Commission in Brussels or the ECB in Frankfurt to speak on their behalf, but other competences remain national. In 2024 Draghi authored a report that called for the EU to deepen its economic integration in order to strengthen its single market.

“Where Europe has federated: on trade, on competition, on the single market, on monetary policy, we are respected as a power and negotiate as one,” Draghi said. “Where we have not: on defence, on industrial policy, on foreign affairs, we are treated as a loose assembly of middle-sized states, to be divided and dealt with accordingly.”

Embracing federalism, Draghi argued, would allow the EU “to act decisively in all circumstances”. But given existing political divisions in Europe over integration, he acknowledged that a vanguard of EU states would need to be allowed to move ahead first.

“This will not be a straight path. As Schuman said in 1950, Europe will not be made all at once,” he added, referring to Robert Schuman, considered one of the EU’s founding fathers.

“Not all countries will join every initiative from the outset, whether in energy, technology, defence or external policy,” Draghi said. “But every step must remain anchored in the goal: not looser co-operation but genuine federation.”