Every September, the President of the European Commission takes the stage in Strasbourg and delivers the State of the Union – or SOTEU, if you prefer the EU bubble’s jargon. Anchored in the EU treaties, it is meant to make EU politics more transparent and to take stock: where Europe stands, where it hopes to go, and which priorities will dominate the coming months.
This year, on September 10, Ursula von der Leyen gave her first SOTEU of her second term. Suspense was high and the mood was heavy. Political backing feels fragile, international tensions are mounting, and expectations on the economic front are enormous. You could almost sense the weight in the room, even from a screen.
And yet, businesses can feel reassured that the right topics were addressed: trade, regulation, energy, climate. These remain key ingredients for Europe’s competitiveness. But the recipe also needs the right quantity, quality, and speed of delivery, and this is the challenging part.
In this opinion, we look at some of them and comment.
Trade and international relations: tariffs and more
President von der Leyen addressed trade, which is indeed an urgent issue in today’s shaky global markets. There’s no need to recap where Europe stands among its non-EU competitors (spoiler: not in the strongest position).
Still, von der Leyen rightly pointed to the Mercosur agreement as a good signal that the Commission is working to broaden its partnerships and diversify supplies. That’s the right move, and one that should be pursued even further with other partners to reduce dependencies.
A bigger headline was of course the new tariff deal with the United States. Von der Leyen described it as necessary to avoid a damaging trade war. Fair enough: nobody wins when tariffs spiral, and such a conflict would have been catastrophic. The agreement does give companies more planning security and was needed. But here’s the rub: for some sectors the challenges are significant, and this cannot be seen as a final fix. It’s more of a patch than a permanent solution.
But there’s more to this story than tariffs. And it bears repeating: we so often focus on what happens outside the EU’s borders, while forgetting that the bigger bottlenecks lie within our own: and the power to fix them is, in fact, in our hands.
The Single Market: our hidden gem, still underused
Despite all the talk of integration, the Single Market still doesn’t function as seamlessly as it should. Von der Leyen herself cited IMF figures that put the barriers in stark terms: they weigh on companies like a 45% tax on goods and a 110% tax on services. Hardly the kind of boost you’d expect from Europe’s flagship project.
Now picture a small Luxembourg firm having to add that much to its invoices just because of red tape, fragmented regulations, or cross-border barriers. It sounds absurd, but that’s the reality. And we’re not doing enough to fix it. That image alone should be enough to show why repairing the Single Market is so crucial.
What’s needed is not another grand declaration but concrete steps: harmonised rules across member states, no more “gold-plating” of EU laws at national level, stronger enforcement of existing rules, and less fragmentation in services and digital frameworks. From posted workers to e-invoicing, from cross-border infrastructure to skills mobility, the Single Market needs to work in practice, not just in principle.
The reality is that the Commission, as “Guardian of the Treaties”, must step up its role in protecting and enforcing the Single Market rules. But Member States are not off the hook: without their part, the Single Market will remain underused potential.
Regulation: rules on rules
Then there’s regulation (or rather, overregulation). If you were at FEDIL’s Industry Day 2025, you may recall BusinessEurope’s President Fredrik Persson pointing out that during the last Commission mandate, more than 13,000 legislative acts were adopted, compared to about 3,500 at the federal level in the United States. The scale of the challenge is clear: Europe doesn’t need four times as many rules to function, and businesses know it all too well.
To be fair, the Commission has understood the problem and started with its series of “omnibus packages” to simplify and streamline legislation. That’s good progress. But when Eurostat estimates the annual regulatory burden on companies at €150 billion, it’s obvious there’s much more to do.
Let’s be clear: what companies want isn’t deregulation for its own sake. They want better rules. This means fair, consistent, simple and predictable legislations. A framework that supports innovation and investment instead of blocking it.
The Commission must step up with stronger and faster action. Yet without support from Member States and stakeholders, its efforts won’t go far enough. The task is huge, and only a joint push will make it work.
Climate and energy: ambition meets hard reality
Von der Leyen’s speech also focused on climate, decarbonisation, and clean tech. Nothing wrong with that. But here’s the thing: ambition alone doesn’t cut emissions.
Draghi reminded us (again1) that decarbonisation is Europe’s best long-term path to energy independence, despite the continent’s lack of natural resources. But it has to support growth, not undermine it. Without faster investment in cross-border grids, cheaper energy, and quicker permitting, Europe’s goals not only risk staying aspirational but could also end up harming an already fragile industrial base.
We’ve heard it before, including in Draghi’s speech2, and the message is worth stressing again: without competitiveness, Europe cannot finance the green and digital transitions, sustain its social model, or hold its place in the global economy. He also underlined something that matters deeply for smaller economies like Luxembourg’s: national coordination is essential. Fragmented approaches will only slow down progress and raise costs.
Competitiveness is about giving businesses the space to invest, expand, and hire, with clear rules, stable frameworks and predictable costs. Von der Leyen made (or confirmed) important announcements in her speech. They’re good steps, but only if they move quickly from words to action.
The bottom line is simple: without a realistic path that couples climate ambition with competitiveness, Europe risks setting goals it cannot reach.
Shared responsibility: not just Brussels’ job
As already highlighted in this opinion, the point is worth spelling out. It’s tempting to see the Commission as carrying the whole load. When Member States pull in different directions, they don’t just slow down progress, they undercut the very competitiveness they claim to support.
Brussels can set the course, propose the rules, and coordinate. But the real test lies with the capitals. Unless governments match that ambition, the Union risks stalling. Responsibility for Europe’s competitiveness is shared, and the urgency can’t be left to Brussels alone.
From Words to Action
This year’s SOTEU reminded everyone that Europe faces big risks but also big opportunities. The Commission knows it and is working on it. For business, the takeaways are clear: trade agreements matter, the Single Market maybe even more. Simplification is overdue. Climate ambition is essential, but it has to be pragmatic. And competitiveness ties it all together.
Speeches can inspire, they can set a direction. But Europe doesn’t move forward on speeches. It moves forward on delivery. That requires the Commission to be bold and consistent, Member States to act in concert rather than apart, and all other stakeholders, including industry and business, to play their part. But here’s the catch: they can only do so if the policies give them the space and the tools to contribute.