Vulcan View: The latest EU developments 12 May – 16 May

European Commission launches strategic dialogues with defence and chemical industries

On Monday, 12 May, European Commission President Ursula von der Leyen initiated the first-ever strategic dialogues in Brussels with top representatives from Europe’s defence and chemical industries. These crucial meetings aimed to identify shared challenges and map out strategies to significantly enhance the competitiveness, resilience, and innovation of these vital sectors. Thus, safeguarding European security and economic prosperity in the current evolving global landscape.

The Defence industry dialogue

The first of these high-level discussions focused on the European defence industry, a sector whose strength is paramount in the face of increased geopolitical instability, notably Russia’s ongoing war of aggression against Ukraine. President von der Leyen and Defence Commissioner Kubilius underscored the urgent need for Europe’s defence sector to respond with both speed and scale. While acknowledging the industry’s commendable efforts to ramp up production, she highlighted persistent structural hurdles. These include the fragmentation of demand and supply across member states, complex regulatory barriers, securing access to essential raw materials, and the continuous pressure to keep pace with rapid innovation cycles. Furthermore, ensuring access to finance for crucial investments and attracting skilled labour, particularly in STEM fields, were identified as key concerns.

To tackle these challenges, the Commission reiterated its commitment to collaborating closely with the industry. A significant upcoming initiative is the Defence Omnibus package, expected in June 2025, designed to streamline rules and regulations covering certifications, permits, and joint procurement frameworks. This aligns with the broader “ReArm Europe Plan,” which aims to unlock €800 billion in investment and encourage more collaborative defence spending within Europe. The dialogue saw constructive exchanges on securing investments, enhancing industrial cooperation, fostering technological advancement, and developing a robust workforce.

The Chemical Sector strategic dialogue

Shortly after, President von der Leyen, alongside Executive Vice-President Séjourné and Commissioner Roswall, convened a similar strategic dialogue with leaders of Europe’s chemical industry. The dialogue underscored the Commission’s dedication to boosting the chemical industry’s competitiveness while upholding high standards of sustainability, security, and safety.

Key topics discussed included the burden of high energy costs, the need to improve access to capital for investment in green and digital transitions, and the challenge of unfair trade practices and international tariffs. Industry representatives also stressed the complexity of the current regulatory framework and the importance of diversifying supply chains. In response, President von der Leyen underscored the significance of the “Clean Industrial Deal” in addressing these problems. To maintain EU leadership in chemical safety alongside industrial strength, the Commission announced an upcoming Action Plan for the chemical sector by summer, a sector-specific Omnibus legislative package, and a comprehensive Chemicals Industry Package by the end of 2025, all aiming to ensure that consumer protection and competitiveness go hand in hand.

Conclusions

These inaugural strategic dialogues mark a significant step in the European Commission’s proactive approach to bolstering two of the continent’s most critical industrial ecosystems. By fostering direct engagement with industry leaders, the Commission aims to create tailored, effective policies that address specific challenges.

The upcoming legislative packages for defence (June 2025) and chemicals (summer and end of the year) signal a clear commitment to translating these discussions into tangible actions. The ultimate goal is to ensure that Europe’s defence and chemical industries are not only competitive and innovative but also robust enough to support the EU’s strategic autonomy and secure a prosperous future for its citizens. Finally, President von der Leyen and industry representatives agreed on the importance of continued close contact to navigate the path ahead.

Commission rolls out funding initiatives to cement the EU as a research hub

The European Commission announced plans to cement its position as a global leader in research with new calls worth over €1.25 billion becoming available under the Marie Skłodowska-Curie Actions (MSCA). The MSCA funds research and innovation by equipping researchers with new knowledge and skills through mobility across borders and exposure to different sectors and disciplines. The initiative also helps to build Europe’s capacity for research and innovation by investing in the long-term careers of excellent researchers.

The MSCA also funds the development of excellent doctoral and postdoctoral training programmes and collaborative research projects worldwide. The new funding aims to support cutting-edge research and focuses on developing research talent and fostering international collaboration, with targeted support for early career researchers and displaced Ukrainian scientists.

The European Commission will be announcing two new calls for funding to invest in research careers and global collaboration:

• The MSCA Doctoral Networks – consisting of €597.8 million to recruit and train doctoral candidates in academia and other sectors.
• The MSCA & Citizens – consisting of €16.3 million to bring science closer to the public through the European Researchers’ Night and Researchers at Schools activities.

Additionally, with a budget of €22.5 million in 2025, the ‘Choose Europe for Science’ plan aims to strengthen research careers in Europe by funding postdoctoral programmes beyond project-based work. Organisations can receive funding for up to 36 months, followed by a two-year phase sustained by the host institution.

These programmes are open to researchers from across the world, reinforcing “Europe’s ambition to attract and retain top talent while embedding research excellence into local R&I ecosystems.” The call will open on 1 October 2025.

The additional funding investments demonstrate the EU’s commitment to long-term research capacity building and talent development. The MSCA supports both scientific excellence and broader societal impacts by increasing mobility, interdisciplinary experience, and public engagement.

Additionally, by targeting support for Ukrainian researchers and fostering global collaboration, the initiative has a geopolitical and humanitarian side, further reinforcing the EU as a research hub with inclusive values.

Exports up, confidence down: Irish exports reach new high while U.S. tariff threat looms

Public confidence in the Irish economy has declined, despite record export levels. The latest Red C/Business Post poll revealed that Irish consumers have a pessimistic view of Ireland’s economic prospects. 82 per cent believe that the economy will weaken over the next half-year. This reflects a notable shift in consumer sentiment compared with January 2025, where just 44 per cent anticipated an economic downturn.  This stems from the current unstable economic landscape, shaped by Trump’s unpredictable trade policies, particularly the threat of tariffs targeting Irish pharmaceutical exports.

According to a forecast modelling the effects of U.S tariffs on the Irish economy released by the Department of Finance, prolonged U.S tariffs of ten per cent would reduce GDP by 1.5 per cent in 2026. Employment growth would also be affected with approximately 25,000 fewer jobs by the end of 2026. The Department also published a forecast which assumes no import tariffs. In this case, GDP would grow by an estimated 3.4 per cent.

However, despite the economic uncertainty, goods exports surged to a record level in March 2025. In March 2025, unadjusted goods exports rose to €37.3 billion, representing a 94.3% increase (€18.1 billion) compared to the same month in 2024, when the value stood at €19.2 billion. Over the first quarter of 2025, goods exports totalled €88.4 billion, an increase of 63.6% from €54 billion recorded in Q1 2024. This stark increase can be attributed almost solely to businesses seeking to frontload exports to the U.S prior to further tariffs coming into effect.

Tánaiste Simon Harris met with EU trade commissioner Maroš Šefčovič, on Thursday 15 May, to provide an update on his discussions with Irish pharmaceutical leaders. Harris cautioned the U.S against imposing tariffs on pharmaceuticals amid ongoing trade talks with the EU, warning that such a move would undermine the talks. He criticised a “fundamental misunderstanding” within parts of the U.S government regarding pharmaceutical supply chains. On Wednesday 14 May, Šefčovič and U.S Commerce Secretary Howard Lutnick agreed to intensify discussions to inject momentum into slow-moving talks.

With trade negotiations between the U.S and EU on going, it emerged on Thursday 15 May, that Europe is unlikely to accept a U.K style trade deal with the U.S. European officials are likely to seek more ambitious trade terms with the Trump administration, according to several EU sources.

Compliments of Vulcan Consulting – a member of the EACCNY