The FIA should allow unlimited design/testing of engines for a year or two. And get rid of the 4 engines for entire season rule for this year. That way other manufacturers can catch up and it won't negatively affect the smaller teams with little budget.
You can't punish Mercedes for making the best engine. But you should allow others to catch up.
This is a problem - Ferrari have improved a huge amount - but nowhere near enough to challenge Mercedes (and with the engine tokens it means Mercedes can develop the exact same amount of the power unit as those trying to catch up) there is a good chance they will never close the gap!
Renault don't appear to know HOW to improve - with the limited tokens they can decide what bit to change but the lack of testing means they have to guess at a solution and if it doesn't work they are stuck with it - take this year, they have changed 2/3rd of their allowed tokens and yet Red Bull are saying they don't see an increase in power and reliability is actually worse than this time last year (which is unbelievable when you think back to the state they were in last year). The problem is by the time they ran the upgraded engine in Jerez it was way to late to do anything about it and now they are stuck with it for the year.
I don't know the answer - remove the restrictions and allow testing and eventually they will all end up with similar performance if they throw everything at it (although in the short term there is every chance Merc will go further ahead as they seem to have the best grasp of these engines) BUT that would send costs through the roof and out of all the engine manufacturers Renault seem the ones that don't want to put as much money in. Mercedes already did that from the off and they are now reaping the rewards.