BRUSSELS — Europe must increase public investment by nearly $900 billion a year in sectors such as technology and defense, according to a long-awaited report published Monday in response to growing anxieties about the Continental economy lagging behind that of the United States and China.

The challenge for the European Union is “existential,” Mario Draghi, a former president of the European Central Bank, said Monday in Brussels. If Europe cannot effectively compete and, in turn, provide its people with security and prosperity, he said, “it will have lost its reason for being.”

Draghi said that, to meet the objectives in his report, the EU needed more annual investment of up to $884 billion, an amount equivalent to about 4.5% of the EU’s gross domestic product last year. By comparison, investment under the Marshall Plan from 1948 to 1951 was equivalent to about 1.5% of Europe’s economic output.

The analysis is the result of a yearlong study requested by the European Commission on the causes of Europe’s competitiveness crisis, and it will serve as a guide for policymakers in Brussels, who will soon meet to determine the next five-year strategic plan for the bloc’s 27 member states.

Conditions that have contributed to the Continent’s prosperity have changed substantially since the coronavirus pandemic and Russia’s invasion of Ukraine. Cheap Russian gas is no longer available, and energy prices have soared. Those prices have come off their peak, but European companies still pay two to three times more for electricity than U.S. companies do, the report found.

The EU has also acknowledged that it needs to significantly increase military spending.

At the same time, growth and investment have fallen behind that of the United States and China, the world’s two largest economies, which are both engaged in multibillion-dollar efforts to expand their tech and green industries.

Europe has experienced weak demand for its exports, especially from China, and its position in advanced technologies such as artificial intelligence is declining: Only four of the world’s top 50 tech companies are European.

Armida van Rij, the head of the Europe program for the research group Chatham House, said Draghi’s report was short on details about the source of the enormous investment required to reverse Europe’s economic decline.

“Where is the money going to come from?” van Rij said. “That’s really the bottom line of it, especially given Germany’s economy and economic situation and finances, where perhaps in the past, it might have led on that, but now it’s just not really a position to be able to do that.”

Another way of raising money that Draghi favors — issuing more common debt — is contentious among member states.

To transform Europe’s economy, the EU must develop an industrial strategy that includes a shared energy grid, joint military procurement as well as advanced training programs for workers. About a quarter of European companies said they had difficulty finding employees with the necessary skills, especially at the managerial level, the report found.

Draghi’s report reiterated the call for European countries to be more coordinated in the policies they establish to address shortfalls in competitiveness.

“The amount of bureaucracy put forward by Brussels over the last couple of years has created a huge problem for Europe to remain competitive,” said Simone Tagliapietra, of the Bruegel Institute, a European think thank.

But the politics are more complicated now. Far-right parties hostile to some EU initiatives and wary of extending more power to Brussels are in government in several European countries and gained seats in the European Parliament’s elections this summer. Many of Draghi’s proposals would require unanimous consent from member states, and several have objected to some policies.