A milestone event in the calendars of EU insiders, the annual State of the European Union (SOTEU) address is the opportunity for the European Commission President to reflect on past achievements and future priorities.
Facing a turbulent economic and geopolitical environment, President von der Leyen stayed true to her agenda, emphasising heavily the successes of the twin transition, the efforts to facilitate a competitive European industry, the need for open but fair trade, the bloc’s future expansion, and the continuous support for Ukraine.
While it remains unclear whether von der Leyen will run for another term as a European Commission President in many ways today’s State of the Union address was reminiscent of a candidate speech.
Here are our takeaways, reflecting on the key priorities outlined in her speech and on what was left unsaid.
The EU Green Deal through an industrial lens
The overarching message on sustainability is clear: modernisation and decarbonisation are intrinsically linked and destined to coexist harmoniously.
Initiatives like the Net-Zero Industry Act and Critical Raw Materials Act will pave the way forward, ensuring a green and digital transition that benefits each sector. In the energy sphere, the launch of the European Wind Power Package, promising less bureaucracy and Clean Transition Dialogues with industries. However, France might be baffled by the fact that nuclear power was nowhere to be found in the speech while hydrogen, wind, and solar made their way to the renewable energy priority list.
Yet, even as we pay heed to what is being said, our attention remains fixed on what is left unsaid. Equally policy topics such as chemicals, pollution, consumer protection, the circular economy or animal welfare, were also left unaddressed.
This did not remain unnoticed by the Greens and S&D, who urge the Commission President to “stay firm” in view of the recent pressure from the conservative side to slow down the green agenda.
Building Europe’s AI future
Innovation and competitiveness stand out as the keywords for the President von der Leyen’s vision of the digital sector. The Digital Services Act and the Digital Markets Act have been flagship initiatives for this Commission’s mandate. In addition, von der Leyen hopes to face emerging risks, such as data flows disinformation, and the spread of harmful content with the Data Act, expected to be adopted by the end of this year, and the European Media Freedom Act. With the EU Chips Act, the Commission hopes to make Europe independent from China in semiconductor manufacturing, at the same time as enhancing the competitiveness of the sector.
And yet, the big focus on digital policy of this year’s speech has been Artificial Intelligence (AI). It is undeniable that Europe is leading the discussion on AI. The Commission has three pillars on which to base the development of AI in Europe, including guardrails, governance and guiding innovation. The first one is based on ensuring a responsible and transparent AI, as proposed through the AI Act, still under discussion. Secondly, the Commission wishes for a global and coordinated approach to the new technology. And thirdly, innovation will be guided through open dialogue and ethical standards.
Interestingly, cybersecurity related files and the renewal of the Product Liability remained out of the President’s speaking points despite their relevance to build a safe and fair digital space.
Continuing at the defensive line on trade
With competitiveness as key part of the message, trade came as closely related. The focus was more on trade defence, rather than openness. The reasoning is familiar: if the EU aims at strengthening its technological and market position, it has to ensure that global competition is fair. The target is, very explicitly, China and its state subsidies. Von der Leyen then announced an anti-subsidy investigation against Chinese electric vehicles, accusing Beijing of selling them “at artificially low prices.” We learnt the lesson of the solar panels market, she said. We can imagine France cheering, but how will this be digested by export-led Germany?
On the “openness side”, von der Leyen guaranteed the commitment to complete trade talks with Australia, Mercosur and Mexico by the end of the year. Will it be realistic considering the frictions still remaining on each negotiating table?
For the short term, economic security and trade defence remain high on the agenda. Regulations like Foreign Subsidies, Anti-coercion, Carbon Border Adjustment Mechanism are ready to bite.
Funding solutions to the latest crisis
Enhancing EU funding has been at the heart of this Commission’s crisis response toolbox and according to today’s speech, European companies can expect this effort to remain on President von der Leyen’s agenda. As anticipated, the President mentioned key successes in times of crisis, including the Covid-19 pandemic and the energy crisis.
Funding will continue to be a key facilitator of the competitiveness of European businesses as they transition to a green economy. As such the Commission President urged for a swift adoption of the proposal for Strategic Technologies for Europe Platform (STEP), which is currently under scrutiny in the European Parliament and the Council of the EU. In practice, STEP aims to mobilise EU funding ‘to invest in everything from biotech to clean tech’ and of course, AI. In pursuit of the competitive edge, EU funding will remain a strategic opportunity for businesses, not only providing additional liquidity for innovative projects but also potential political access.
As the season finale of her legislative term kicks off, President of the European Commission, Ursula von der Leyen, delivered a State of the Union address without many surprises. Key areas of focus in the upcoming months include driving forward industrial and digital competitiveness, decarbonisation and fair trade. However, what remains one of the best kept secrets in Brussels is whether von der Leyen will run for another term as a Commission President, which was notably not indicated during this year’s Union address.