Vulcan View: The latest EU developments 6 October – 10 October

European Commission unveils “Apply AI” strategy to make Europe a global leader

On Wednesday (8 October), the European Commission shared its €1 billion plan to boost the use in key industries, create leading European AI businesses, and reduce the EU’s dependency on American and Chinese technologies.

The strategy aims to speed up the use of artificial intelligence across Europe’s economy, especially among small and medium-sized businesses (SMEs) and in the eleven sectors essential to European competitiveness identified by Mario Draghi, former European Central Bank president and Italian prime minister, in his famous report, most importantly healthcare and pharmaceuticals, robotics, energy and green technologies.

It introduces an “AI First” approach, encouraging organisations to consider AI solutions under a “buy European” principle. It also supports the use of open-source AI to strengthen Europe’s technological independence.

Built around three main pillars, the strategy focuses on: boosting AI use in the key industries and public sector, expanding Europe’s innovation capacity, and creating a new governance system with the Apply AI Alliance and AI Observatory to coordinate actions and monitor progress.

An AI continent 

The new strategy is part of and builds on the “AI Continent Action Plan” published in April. Back then, the Commission outlined concrete actions it deemed crucial to narrow the gap with the US and China, from investing in and building AI factories and acquiring supercomputers, to teaching AI skills and poaching talent in the field.

The current Apply AI strategy is only part of a wider package this year. On the same day, the Commission communicated the AI in Science strategy to support scientists to “responsibly adopt AI technologies for carrying out their research” through RAISE (short for “Resource for AI Science in Europe”), a virtual institute to coordinate AI resources, including computational power, data, talent and funding across the EU, countries and the private sector. The forthcoming Data Union strategy should scale up the use and availability of data for AI training.

The Commission is also asking stakeholders to submit feedback before 14 October on what AI, data and cybersecurity rules could be simplified in the “omnibus” package still expected this quarter.

Furthermore, the Commission will adopt next year’s work programme for its research programme Horizon Europe (€ 93.5 billion under the 2021-2027 budget) with an additional funding option for artificial intelligence development and deployment. A separate GenAI4EU initiative will also look at which scraps of the present budget can be used to develop the AI used by chatbots such as OpenAI’s ChatGPT or Google’s Gemini.

Will it suffice?

It remains to be seen whether a top-down strategy will be effective. A Commission official told news outlet ScienceBusiness that the Commission is “occupying a space which is empty at the international level, because our main competitors, not to name the US and China, do not have a strategy.”

However, the €1 billion budget addresses only a small part of Europe’s wider investment gap. According to the Commission’s department for communication networks, AI investment in Europe represents only about 4 per cent of US spending, including both public and private funds. For example, the European Innovation Council has an annual budget of €256 million, compared with $6 billion in the United States. Similarly, venture capital investment in AI in 2023 amounted to $8 billion in the EU, compared with $68 billion in the U.S.

Irish Budget 2026: a pro-business reset for long-term competitiveness

On Tuesday (7 October), Ministers Paschal Donohoe and Jack Chambers delivered Budget 2026, a €9.4 billion package designed as a deliberate fiscal reset. The budget pivots away from short-term stimulus to instead prioritise long-term business competitiveness and resilience, aiming to safeguard jobs by strengthening the core fundamentals that sustain enterprise: innovation, infrastructure, and talent. However, households may see limited disposable income gains.

Enterprise and innovation

At the heart of the pro-business agenda is a significant boost to the Research and Development (R&D) tax credit, rising from 30% to 35%. This move signals the Government’s determination to maintain Ireland’s attractiveness as a global hub for innovation. The first-year payment threshold has also increased from €75,000 to €87,500, offering stronger support for smaller and early-stage projects.

A forthcoming “R&D Compass” will guide further reform of innovation supports, ensuring policy keeps pace with industry practices around outsourcing and qualifying expenditure. Enterprise Ireland and IDA Ireland will both receive additional funding to help Irish firms scale globally and attract high-value foreign investment, while Local Enterprise Offices will expand regional business supports.

In addition, the establishment of a National Artificial Intelligence Office will promote the safe and transparent adoption of AI across sectors, reflecting the government’s commitment to future-focused competitiveness.

Tax and regulatory framework

Budget 2026 introduces several measures to simplify and modernise business taxation. Updates to the participation exemption for foreign dividends will expand Ireland’s appeal for multinational headquarters, while planned reforms to the interest deductibility regime aim to make the tax system more transparent and internationally competitive.

The Special Assignee Relief Programme (SARP), a key incentive for attracting global talent, has been extended for five years, with the qualifying income threshold increased to €125,000 to keep the scheme balanced and targeted.

Infrastructure and competitiveness

Ireland’s long-term competitiveness depends on reliable infrastructure, and the Government has committed record capital investment through the National Development Plan. Key allocations include €4.7 billion for transport, €3.5 billion for energy infrastructure, and €1.4 billion for water services. Projects such as DART+, BusConnects, the Cork Commuter Rail, and the National Broadband Plan will enhance regional connectivity, support housing delivery, and strengthen business productivity nationwide.

A forthcoming action plan will also reform the delivery of public infrastructure, addressing delays in planning, consenting, and regulatory processes that have hindered development.

Talent and skills

Recognising that human capital underpins innovation, the Budget allocates nearly €5 billion to the Department of Further and Higher Education. This includes expanded apprenticeships, research funding, and targeted capital investment in higher education infrastructure. Automatic pension enrolment, due to begin in January 2026, will enhance long-term income security for 750,000 workers, improving financial resilience and workforce stability.

Conclusion

Budget 2026 is not a populist package, but a disciplined one. For enterprise, it strengthens the pillars that sustain Ireland’s success: competitive taxation, innovation incentives, world-class infrastructure, and skilled talent. In an era of global uncertainty, it positions Ireland as a stable, forward-looking economy committed to sustainable growth and high-value enterprise.

European Commission proposes 50% tariff and reduced quotas on steel imports

On Tuesday (7 October), the European Commission unveiled sweeping measures to shield the European Union’s steel industry from what it calls the damaging effects of “unfair global competition.” Under the proposal, tariff-free steel imports would be slashed by nearly half, and any imports exceeding this reduced quota would face duties of 50%, doubling the current rate. The Commission argues these protections are essential to address a global steel oversupply that threatens both European jobs and the industry’s decarbonisation efforts.

At the heart of the Commission’s strategy are three core measures designed to create a level playing field for European producers:

First, the plan dramatically tightens import controls. It proposes to reduce the annual quota for tariff-free steel imports from current levels to 18.3 million tonnes. Any steel imported beyond this quota will face a steep tariff of 50%, double the current 25% duty. This measure is intended to make it significantly less attractive for foreign producers to flood the EU market with excess steel, thereby helping European factories run closer to their optimal capacity.

Second, the proposal aims to close a critical loophole used to bypass existing trade rules. A new “Melt and Pour” requirement will be introduced, forcing importers to declare the original country where the steel was first melted and cast. This is designed to prevent circumvention, where steel produced in one country—often with the help of heavy state subsidies—is minimally processed in another before being exported to the EU to obscure its true origin and avoid anti-dumping duties.

Finally, this is not just a defensive move but also a diplomatic one. The Commission has invited “like-minded countries” to collaborate in protecting their economies from global overcapacity. This is widely seen as an outreach to the United States, with the hope that by demonstrating its commitment to tackling the issue, the EU can persuade Washington to lower its own significant tariffs on European steel and aluminium, ultimately creating a united transatlantic front.

The Commission’s intervention comes at a critical time for an industry that is a cornerstone of the European economy. The sector is struggling against a tide of global overcapacity, which now stands at over 600 million tonnes, more than five times the EU’s entire annual consumption. This amount of cheap, often state-subsidised foreign steel has pushed down prices and squeezed European producers, leading to significant job losses. According to the European trade union IndustriAll, the sector shed 18,000 jobs in the last year alone. This pressure not only threatens the livelihoods of communities built around steel production but also hampers the industry’s ability to make the vast investments needed for decarbonisation, a key pillar of the EU’s green transition.

Next steps

The Commission’s proposal must now be debated and approved by the European Parliament and the Council of the EU. While the plan has received strong backing from many MEPs and a coalition of countries led by France, its passage is not guaranteed. The position of industrial powerhouses like Germany, whose world-leading car manufacturing sector is a major consumer of steel, will be crucial in the upcoming negotiations. The Commission’s objective is for the new measures to be adopted and in place by June 2026, when the current safeguard rules expire. In this sense, it would ensure uninterrupted protection for the EU’s steel industry.

 

Compliments of Vulcan Consulting – a member of the EACCNY