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Vulcan Insight | Ursula von der Leyen Delivers Maiden SOTEU Address

One year after assuming her role, European Commission President Ursula von der Leyen today delivered her maiden State of the European Union address to the European Parliament’s Brussels plenary.

Speaking for over an hour, President von der Leyen presented her vision for revitalising the EU’s economy in a sustainable, green and more innovative way.

Building on her former experience as German Defence Minister, President von der Leyen also spoke passionately about her vision for a more geo-politically impactful European Union that stands up for multilateralism, human rights and democratic values.

Below we provide a brief overview of President von der Leyen’s key proposals and discussion points:

Health

Referencing the current COVID-19 pandemic, the courageous work of Europe’s healthcare workers as well as the lack of healthcare competencies at the EU level, President von der Leyen called for the establishment of a stronger European Health Union with a future proofed EU4Health funding programme.

To achieve this, she proposed strengthening the European Medicines Agency and European Centre for Disease Prevention and Control (ECDC) as well as the establishment of a European Biomedical Advanced Research and Development Authority (EBARDA). Moreover, she argued that the planned conference on the future of Europe should discuss questions of further EU health competencies and revealed that she will host a Global Health Summit in Italy in 2021.

Social Europe

President von der Leyen welcomed the quick adoption of the SURE programme which means that 16 Member States will soon receive almost €90 billion to support workers and companies.

Furthermore, she mooted her upcoming October proposal for a fair minimum wage for workers across the EU. The proposal is set to be unveiled on 28 October and is set to fight wage dumping across the EU. In a nod to Swedish concern on the topic, the proposal is set to address and support of both a statutory minimum wage and collective bargaining schemes.

Economy and finance

The Commission President welcomed the Council’s agreement on the €1.8 billion NextGenerationEU MFF and Recovery fund and called on Council and Parliament to reach an agreement as soon as possible.

While she welcomed that the “confidence in the euro has never been stronger,” she called on policymakers to “use this opportunity to make structural reforms in our economies and [finally] complete the Capital Markets Union and the Banking Union.”

Maximising the Single Market

Referencing the close of the Schengen borders at the beginning of the pandemic, President von der Leyen reiterated the crucial importance of a fully functioning Single Market to the prosperity of Europe and success of European companies and consumers.

She, however, recognised that there may still be too many barriers to the EU’s four fundamental freedoms in the Single Market. To remove these, she promised to propose a new strategy for the future of Schengen, an updated Industrial Strategy, as well as an adapted competition framework in the first half of next year.

Fighting Climate Change

While referencing the EU’s Green Deal as the blueprint for the green transition, President von der Leyen recognised that the status quo is not enough and that the Union needed to go faster and be better. As such, and as expected, she announced that the Commission will propose increasing the EU’s 2030 emissions target from its current 40% (compared to 1990 levels) to 55%. While deemed by many as too little, a 55% target was only this week backed by the European Parliament’s environment committee.

She also argued that fighting climate change involved doing more than just reducing emissions, but also making sustainable change. As such, she promised to revise and update all the EU’s climate and energy legislation to put them in line with the new 55% target. Furthermore, President von der Leyen promised that 37% of NextGenerationEU will be spent directly on the European Green Deal objectives, while 30% of NextGenerationEU’s €750 billion will be raised through green bonds.

In addition, she announced that she wants NextGenerationEU to help create a European Hydrogen Valley to green and support Europe’s heavy industry, and kickstart a European Renovation Wave to reduce everyday household emissions.

Digitalisation

President von der Leyen reiterated that, on digitalisation, Europe needed to restore its global digital sovereignty. To do this, 20% of NextGenerationEU will be spent on digital initiatives. On data, she recognised that Europe is too slow on maximising personal data to develop new business streams, but that it is a global leader with respect to industrial data. To further support this lead, she announced that the EU will build a European Cloud based on Gaia X.

Furthermore, she promised upcoming legislation on regulating artificial intelligence, as well as an update to the e-IDAS Regulation to create a secure pan-European electronic identity that can be used for public and private sector services.

Additionally, Mrs. von der Leyen promised significant investment in digital infrastructure projects, particularly the expansion of 5G, 6G and fibre broadband networks. She also announced an investment drive of €8 billion in the next generation of European supercomputers to further drive Europe’s digital advancements.

Global Europe

While affirming her strong belief in the multilateral system, President von der Leyen recognised its shortcomings and pledged that the EU will work to lead the reform processes of the World Health Organisation and World Trade Organisation.

Speaking of Europe’s relations with 3rd countries, President von der Leyen stressed that while the EU always aims to cooperate with countries such as China, Russia or Turkey, it should always take a clear position based on its values. As such, Europe must always call out human rights abuses anywhere in the world.

Strikingly, in this context, she called out EU Member States to move matters of foreign affairs to qualified majority votes, at least on issues of human rights and sanctions implementation. Mrs. von der Leyen also announced that the Commission will put forward a European Magnitsky Act.

President von der Leyen also reiterated that she stood ready to build upon and strengthen the bilateral relationship with the United States, be it on tech, trade or tax.

Brexit

On Brexit, Mrs. von der Leyen reiterated her full support for Ireland, the Good Friday Agreement and the Withdrawal Agreement, but also recognised that with every passing day the chance of a no-deal became increasingly likely.

She also, again, repeated that the Withdrawal Agreement cannot be unilaterally changed, disregarded or dis-applied, and that the EU will never backtrack on its commitment to peace on the island of Ireland.

International taxation

The Commission President again promised that the Commission was working on a Carbon Border Adjustment Mechanism (tax) which should motivate non-EU manufacturers and EU importers to reduce their carbon emissions, while ensuring that we level the playing field in a WTO- compatible way.

In addition, she also reiterated that the Commission is set to propose a pan-EU digital tax in early 2021 should the current negotiations at OECD and G20 level fail.

Migration and values

With regard to EU migration policy, she annouced that the Commission is due to propose its New Pact on Migration next week. The pact is set to ensure a closer link between asylum and return, while taking action to fight smugglers, strengthen external borders, deepen external partnerships and create legal pathways. She, however, again called on Member States to manage the question of migration together.

President von der Leyen also called out the backsliding on the Rule of Law by Member States such as Hungary and Poland, but also the increasing trend of fraud, corruption and conflict of interest in some Member States’ use of the EU funds, calling it non-negotiable.

Quoting the late John Hume in a European Parliament speech in 1998, “The European visionaries decided that difference is not a threat, difference is natural. Difference is the essence of humanity,” she called out the increase in racism, discrimination and anti-Semitism globally and in Europe, as well as, particularly, in the LGBTIQ-free zones in Poland, calling them “humanity free zones, with no place in our Union.” As such, she announced the appointment of the Commission’s first-ever anti-racism coordinator

Compliments of Vulcan Consulting – a member of the EACCNY.