In her annual State of the Union (SOTEU) address on 13 September 2023, Ursula von der Leyen, President of the European Commission, delivered a comprehensive review of her tenure. This address was of particular significance as it marked her final SOTEU before the upcoming European Parliament elections in June 2024, sparking speculation about her future role within the EU.
Reflecting on achievements and challenges
President von der Leyen commenced her address by underlining the importance of the SOTEU. It serves as a gathering point for EU lawmakers in Strasbourg to assess the EU’s progress and challenges. Reflecting on her tenure since 2019, she cited the EU’s response to the COVID-19 pandemic, its support for Ukraine, and the implementation of the EU Green Deal.
President von der Leyen’s address emphasized again her vision for a more geopolitically engaged Commission. She stressed the EU’s role in global initiatives like the Global Gateway and announced significant projects, including the India-Middle East-Europe Economic Corridor. Acknowledging the necessity for the EU to engage with countries across the Mediterranean and Africa, especially given ongoing challenges stemming from the Ukraine conflict and a complex geopolitical landscape, was pivotal.
However, tangible measures to safeguard the EU’s economic interests and enhance its global standing are still imperative. This entails advancing, concluding, and ratifying trade agreements with various partners, including the EU-Chile agreement, the EU-Mercosur agreement, and deals with Australia, Mexico, and several Asian nations like India, Indonesia, Malaysia, Thailand, and the Philippines. President von der Leyen also emphasized the importance of « de-risking » rather than « de-coupling » in dealings with key trading partners like China, recognizing the need to reduce risks while maintaining crucial trade relationships.
Priorities and challenges for european industry
A notable aspect of President von der Leyen’s address was her recognition of three significant challenges facing EU industry: skills and labour shortages, inflation, and persistently high energy prices. These concerns have been consistently voiced, demonstrating that the EU business and industrial community’s concerns are being heard. Regarding energy prices, President von der Leyen emphasized the benefits of unity, stating that by staying united, the EU managed to tackle this challenge more effectively. This collaborative approach should serve as a model in addressing similar challenges, such as those related to critical raw materials or clean hydrogen. At FEDIL we have consistently argued that a unified EU approach is the most effective response to energy challenges, and we are pleased to see the Commission recognizing this.
Additionally, President von der Leyen’s affirmation of support for EU industry during the digital and green transition is a welcome development. Her speech indicated an increased focus on the EU business and industrial environment, extending to various contexts, including social dialogues, AI, and digital matters, which is greatly appreciated.
Integration of internal market concerns
Unfortunately, the EU’s internal market was not addressed in her speech, despite its huge importance for EU competitiveness, particularly for smaller Member States like Luxembourg. Harmonization of rules within the internal market is essential, as it simplifies trade, commercial transactions, and the exchange of services with partners in other EU Member States by reducing unnecessary regulatory differences. This harmonization not only enhances efficiency but also reduces legal risks in transactions between companies, creating a positive environment for businesses to trade their products and services seamlessly.
Conversely, when rules in Member States differ, companies operating across borders, including those in Luxembourg, must adapt to varying legal requirements in national markets. This situation can lead to inefficiencies, increased costs, and legal complexities for businesses navigating diverse regulatory landscapes. President von der Leyen’s omission of the internal market’s significance in her speech is concerning, particularly given the potential implications for the competitiveness of smaller Member States. It is imperative that the Commission remains steadfast in ensuring the continued success of the internal market, recognizing its role in promoting a harmonized and prosperous European economy.