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Von der Leyen makes big promises, but will they be enough?

Future of Europe / EPC ROUND-UP
European Policy Centre

Date: 14/09/2022
In her State of the Union (SOTEU) speech, President von der Leyen reaffirmed the EU's continued strong support for Ukraine and its people. The war and its aftershocks - skyrocketing energy prices and inflation - took up most of her speaking time. She pledged money and resources to rebuild the country, not to back down on sanctions, find concrete ways to lower people's energy bills, invest more in renewables and hydrogen and help small and medium businesses weather the coming storm. She even called for a European Convention to potentially change EU decision-making.

But despite all these promises and big aspirations, her speech also inevitably highlighted the EU's gaps and weaknesses. Will it be enough to assuage European people's worst fears and convince them that we can only get through this together? 

The EPC Round-up assesses pivotal EU policies from different angles. It collects contributions from EPC analysts and experts in the field, bringing together various points of view for a more comprehensive and nuanced picture.

“Never before has this Parliament debated the State of our Union with war raging on European soil.”

Today’s SOTEU speech was the most important of Commission President von der Leyen’s tenure. Halfway through her mandate, it was an opportunity to further shape the EU policy agenda for the next two years and show that the European Commission is ready to respond in the short, medium and long terms to the many crises set off by Russia’s illegal war of aggression on Ukraine.  

The address had to respond to the European Union’s three current tests: leadership, unity and solidarity. The leadership test means keeping Ukraine and its people – and European support for the war-torn country – at the top of the political agenda, preparing the European public for a difficult winter ahead, and proposing new ways to repel and counter Russia’s aggression. There was very little on the latter point besides reciting the harm done so far to the Russian economy.

Despite her rhetoric of “courage” and of facing a “war on our future,” von der Leyen’s address was underwhelming, with very few new concrete ideas on how to lead, stay united and build intra-EU solidarity in this age of permacrisis. Most of what was announced, especially in response to the energy crisis, is old news. On foreign policy, the level of generalisation and lack of detail was almost disheartening – and not even a single word on European defence. For a geopolitical Commission, that does not bode well for the future. Time will tell whether or not her German message on Europe’s dependency on China for critical raw materials – which are key for the twin digital and green transitions – gets lost in Berlin.  

While democracy was barely mentioned in the context of EU domestic policies, von der Leyen underlined the importance of cooperating with “like-minded partners” in foreign policy. She stated that the EU should strive to “expand this core of democracies” and deepen relations between democracies worldwide. Von der Leyen seems to be advocating – in line with the German foreign minister’s approach – for a values-driven EU foreign policy that recognises the threat that autocracies pose to our democracies. What this means for other fields – especially EU trade and investment policy – remains to be seen. It is also unclear how this approach will affect neighbourhood and enlargement policy or how important democracy will be in the European political community initiative proposed by France.  

What is clear is that the European Commission wants to arm itself against foreign influence with a “Defence of Democracy package” and a stronger stance against disinformation. At the end of 2020, the Commission proposed a European Action Plan for Democracy, which is being implemented slowly but is still too weak against foreign interference. This new initiative to protect democracies is therefore welcomed, as the dangers posed by foreign influence are already clearly visible. Russian propaganda and interference in EU member states pose a real threat to a united European response to the war. However, it might already be too late: Both in the EU and within candidate countries, there are several countries that resemble more autocracies than democracies. It remains therefore to be seen to what extent the Commission can move forward in this area when countries like Hungary and Poland seem to no longer be part of the group of ‘like-minded partners’.

Since Commission President von der Leyen proclaimed the European Green Deal as the EU’s blueprint for transforming our economy and society in her first SOTEU address, it has provided a compass for EU action. Its vision and framework have guided the pandemic recovery and led to initiatives like REPowerEU, which aims to promote energy savings and the fast deployment of renewables in reaction to the war in Ukraine.

As many new European households slip into energy poverty for the first time, primarily due to our reliance on (Russian) fossil fuels, maintaining public support for – or at least not opposition to – the goals of the Green Deal is crucial. While today’s SOTEU did not dwell on the measures needed to tackle climate change, the latest Eurobarometer confirmed that it remains a top public concern, albeit now complemented by the cost of living, energy supplies and the economy. But as this summer of heatwaves, fires and droughts has shown, the climate crisis is not waiting for us to first fix the rest. All of these challenges must be tackled simultaneously.

The Green Deal still provides the necessary framework. Its multiple benefits – reducing exposure to high and unpredictable fossil fuel prices; improved housing; health benefits; new employment opportunities; improved social cohesion; and strengthened, safer and more sustainable communities – all respond to the wishes of Europeans clearly articulated during the Conference on the Future of Europe. While complex geopolitical actors may beg for attention, our world is the stage for all of it. Its significance was not recognised today.

As rightly recognised by President von der Leyen, the root cause of the current energy crisis is our dependency on fossil fuels. Cutting our reliance on coal, oil and gas by, firstly, enhancing energy savings and efficiency, and secondly, accelerating the roll-out of renewables is the only viable solution.

It is also necessary to recognise the need for immediate support for households at risk of poverty and the companies worst affected by the soaring electricity and gas prices. The proposed cap on the revenues of electricity companies offers an attractive way to provide such relief, as it will not undermine incentives to cut back consumption. However, as also emphasised in the speech, we cannot keep “driving on the same road” by massively subsidising fossil fuels.

A continuation of the status quo will not just harm the climate but also damage European public finances and entrench our dependence on imports from authoritarian regimes like Putin’s Russia. Member states should take this message to heart as they aim to shield consumers from the effects of the energy crisis. National policies aimed at reducing electricity and gas bills may appear to provide immediate relief but are actually effectively subsidising energy consumption and exacerbating this crisis. Member states must make a coordinated effort to stop such counterproductive measures and clear the way for a clean, affordable and secure energy future in Europe.

President von der Leyen rightfully recognised the challenges the EU is facing regarding accessing critical materials and rare earths essential for the green and digital transitions. The energy trade with Russia has ended in a disaster and teaches us a lesson about the risks of putting all eggs in one unreliable basket. As indicated by von der Leyen, China is the EU’s main supplier of raw and processed materials. This high dependency on materials from one source, wrapped in an unreliable partnership, can be a risky business for the EU in the long run.

The EU must speed up its efforts to make its economy more resilient by gaining access to needed materials. As pointed out by von der Leyen, the EU must diversify its supply of raw and processed materials, and so the proposed “Critical Raw Materials Act” is a welcome initiative. However, the EU must also reduce its demand for virgin materials and retain the value of used materials in the European economy for as long as possible. Despite the president not stressing the importance of being smarter with the resources we have, the need to accelerate the transition to a circular economy is greater than ever. This requires finalising the regulation on sustainable products, creating a single market for waste, and incentivising innovative business models, such as selling services instead of products.

By recalling this year’s summer of droughts, fires and melting glaciers, President von der Leyen underlined that the climate crisis must be tackled urgently. But while she recognised that the transformation to a more sustainable economy has already begun by citing some inspiring examples, she could have said more about the role of local-level action. It is in the EU’s interest to harness the potential of local communities and cities to not only address the planetary crisis but also support citizens through the green transition.

As cities are major energy consumers and emitters of greenhouse gas emissions, the measures they take to reduce their climate and environmental footprints will greatly impact the green transition’s success. Cities can also help accelerate the transition, as they are responsible for managing areas where change is needed (e.g. public buildings and housing, transport systems, waste management, public procurement). Finally, cities can be important actors in delivering a just transition.

Thus, while left unsaid in the SOTEU, the EU must encourage bottom-up initiatives where citizens contribute to shaping the local communities of tomorrow. The EU should continue to support and strengthen opportunities for cities to exchange good practices. EU funding like the Next Generation EU and technical assistance to access said funds should be provided to cities for their greening efforts.

While President von der Leyen demonstrated strong solidarity with and support for Ukraine amid Russia’s unprovoked aggression, she could have been clearer on what is at stake for the EU, as well as the needed measures and even sacrifices if we are to win this war. The EU, its member states, our industry and citizens must work together – only together are we stronger than the sum of our parts. We need to combine the quest for security with that for solidarity while ensuring that the measures taken also lead to greater sustainability and prosperity.

With numerous crises demanding our leaders’ attention, this is not the time for short-sighted decisions, policies or investments. As the president herself indicated, we must protect our children’s future.

In this context, while the president recognised the climate emergency and put much-needed emphasis on managing the ongoing energy crisis, it is striking that she only commented on the food crisis during the discussion with the Members of the European Parliament. The president failed to recognise the key role of intensive European agriculture in undermining global food security. Moreover, while she called nature an ally, she did not explain how European agricultural production would be transformed to support these efforts.

The food crisis should be a wake-up call for the EU to accelerate its transition from an unsustainable food system – which harms our food security, climate, environment, people, farmers, economy and society – to a more sustainable and resilient one. Now is not the time to burn edible food crops for energy. We must reduce food waste and shift our focus from intensive animal agriculture (and producing animal feed) to producing healthy and sustainable food for human consumption. We should build on the power of nature, land and seas to restore carbon and support ecosystem services essential for maintaining life.

Commission President von der Leyen set out her vision for the future of EU economic governance with a few basic principles for fiscal rules. Firstly, she endorsed more flexibility in debt reduction paths. Secondly, she advocated for member states to be held accountable for agreed fiscal rules. Thirdly, she stressed the need for more simplicity, reducing the extraordinary complexity of the current framework of the Stability and Growth Pact. Fourthly, she emphasised the need for more member state ownership in fiscal policies.

Von der Leyen hopes this will increase investor confidence in the financial markets. Indeed, credible fiscal rules are essential for a more stable sovereign debt market. According to the president, all this should open the space for more strategic investment while maintaining fiscal sustainability.

The process behind the COVID-19 recovery fund could be a good template for operationalising these principles. It could also be beneficial to encourage a more targeted and ownership-driven approach to stability and growth. At the same time, we believe that strategic investment objectives like the digital and green transitions should not lie on the shoulders of member states alone. Instead, the EPC endorses an EU-wide fiscal capacity to finance the twin transitions.

While it is true that the Union is facing many urgent challenges – the war in Ukraine, inflation, rising energy prices –, emerging technologies and defence issues have been the great absentees of this year’s SOTEU address. Von der Leyen’s speech lacked, for example, references to the virtual dimension of the war via cyberattacks and disinformation operations. These are equally important issues that challenge the European economy, security and values.

The speech did bring good news to the technology industry in Europe, though, with the announcement of a “Critical Raw Materials Act” and commitment to establish new partnerships. Both partnerships and regulation must go hand-in-hand to reduce Europe’s dependency on countries like China and reorganise Europe’s technological supply chains. To that end, a stronger partnership with Ukraine should be envisioned, given its relevance in the neon gas market.

Lastly, Europe must secure access to raw materials to shape its future deep tech supply chains. Europe depends on geopolitically unstable areas for materials needed for quantum and space technologies, which will play a significant role in Europe’s future. For that reason, European action to improve its security of supply should envision not only current supply chain challenges but also future ones.

Right at the beginning of her speech, von der Leyen made clear that the war in Ukraine is a battle between autocratic and democratic political models. Despite her clear words, her speech remained rather weak regarding the rule of law, with only a short mention towards the end: “It is my Commission’s duty and most noble role to protect the rule of law.” But the European Commission is yet to fulfil this duty – critics would even call it a failure.

Rather than detailing a comprehensive approach to safeguard values, von der Leyen chose to focus on corruption. This particular focus says a lot about the Commission’s strategy. Since 24 February, the EU has been rather lenient towards the Polish governments’ repeated rule-of-law violations, as the country is an important ally against Putin. Poland’s solidarity with Ukraine is unwavering; the country has taken millions of Ukrainian refugees fleeing Russian bombs. Meanwhile, Hungary increasingly looks like the ‘bad guy’. Orbán has chosen to follow a pro-Russian line, opposes EU sanctions and makes no secret that his government is negotiating its own energy supplies with Moscow. The EU increasingly sees Hungary as the rogue member state standing in the way of a united European response – hence von der Leyen’s focus on corruption, which mostly targets Hungary. 

This approach is flawed, as the member states should uphold basic EU values regardless of their positioning on Ukraine. The EU risks losing its credibility if it accepts double standards. At the same time, focusing on Hungary first and creating a rift between Warsaw and Budapest is arguably a smart political tactic. Before the Russian invasion of Ukraine, the two countries always closely coordinated to block EU policy. The war could therefore lead to a situation where the EU regains more capacity to act.

In her address, President von der Leyen presented an initial list of legislative proposals that answer the demands of the citizens participating in the Conference on the Future of Europe. This alone is noteworthy, as it is the first time a European institution concretely follows up on the outcome of an EU-wide participatory exercise; this was not the case for previous experiments, such as the 2018 European Citizens’ Consultations. Moreover, von der Leyen’s announcement to introduce regular citizens’ panels ahead of key legislative proposals proves that the Commission is finally taking participatory democracy seriously.

The EU’s quest to “constantly gain and regain the citizens’ trust”, however, must now continue in more fundamental, structural spheres. This includes acknowledging the citizens’ overall ambitious vision of Europe’s future forged during the Conference. In order to respond decisively to the challenges of this watershed moment, EU institutional reform will be essential to making policymaking more effective and legitimate in an enlarged Union.

Calling for a European Convention was, therefore, a bold yet necessary move. So far, the Commission is sandwiched between a determined European Parliament and reluctant member states on this issue, shying away from a more pronounced position. Today’s speech could therefore mark an important albeit late turning point in the Commission’s role. Von der Leyen must now stick to her 2019 promise to push ahead and act as an honest broker when it comes to the bloc’s institutional reform plans. More political will is required from the Commission President to implement her agenda and make European democracy fit for the new age.

While the SOTEU address barely mentioned EU enlargement, President von der Leyen did express unequivocal support for the countries aspiring to become members, stressing that the Union “is not complete” without the Western Balkans, Ukraine, Georgia and Moldova. But her fervent rhetoric stumbles upon the current reality of a protracted enlargement process and the consequent loss of credibility. After all, the only significant progress of the past year was opening negotiations with Albania and North Macedonia nearly two decades after both countries applied for EU membership.

Milestones deserve to be celebrated, but the speech fell short of reflecting on the future of enlargement policy. There was no reference to the next steps or how to overcome the hurdles that persistently stall accession negotiations, whether because candidates fail to enact necessary reforms or the EU demonstrates meagre political will to expand. In the aftermath of Russia’s invasion of Ukraine, a watershed moment for Europe, the lack of a clear vision for enlargement policy raises concerns as to how prominently it will feature in the Commission’s priorities for next year. Today’s speech was also a missed opportunity to signal to new and long-standing aspiring members in the Balkans and Eastern Partnership region that words will be followed by deeds and that the prospect of EU membership is a realistic one.

President von der Leyen also supported the call for a European political community, which would rally other like-minded European countries to address pressing, contemporary geopolitical challenges. But we have yet to clarify the goals and benchmarks of what European democracies can collectively achieve to counter rising global autocracy. A mere talking shop will not suffice in today’s volatile security reality.

Across different policy fields, there has hardly been a word that has marked the von der Leyen Commission’s term as much as solidarity. In speaking about how the EU showcased “determination and solidarity” in response to the ongoing, vast displacement of Ukrainians, von der Leyen called for a “blueprint”. But how could a blueprint for migration crises look?

Some of the policy and practical measures of the past months offer building blocks. The quick establishment of a temporary protection regime across Europe and strengthened free movement rights for Ukrainian refugees under the Dublin system are two such examples. There are also efforts underway to give the ad hoc, voluntary solidarity mechanism for facilitating intra-EU relocations a firmer legal basis – a positive sign after many unsuccessful attempts. Finally, the European Commission-hosted Solidarity Platform has already proven valuable for many member states and could therefore be considered in other situations requiring close, practical cooperation.

Nevertheless, other migration and asylum developments were of a very different nature, illustrating that double standards can also be readily applied. Some member states considered preventing migrant movement, infringing fundamental rights and reducing existing standards to be justifiable responses. Moreover, civil society continues to shoulder much of the effort to receive, host and integrate refugees from Ukraine – and this is not sufficiently recognised. Calling for a blueprint is the first step, but translating the solidarity showcased in the Ukraine response into a future-proof template won’t be without challenges.

President von der Leyen’s speech was powerful and moving in its conclusion. In applauding Magdalena and Agnieszka, the two young women who rushed to Warsaw Central station to help meet the needs of the thousands, and later millions, of fleeing Ukrainians, she paid tribute to the enormous support and mobilisation of efforts from civil society and Europeans at large. 

Von der Leyen is right to praise these efforts. But such applause should have also been paired with the recognition that European civil society needs continued support from the EU and national governments, both operationally and financially. Many civil society organisations in Poland and elsewhere have worked at maximum capacity for months. 

Yes, the outpouring of solidarity and activating the Temporary Protection Directive were a success. But we are not there yet. The EU and its member states must continue to address the longer-term needs of Ukrainian refugees, such as accessing the labour market and long-term housing. This is all the more pressing if we are to counter a potential ‘solidarity fatigue’ which could result from overstretching public support or, in the absence of longer-term solutions, the perception that these arrivals are not well-regulated or well-managed.  

The European Health Union (EHU) must become a reality, as President von der Leyen pointed out in her first State of the European Union speech, and the Commission needs to deliver on the promises made at the start of the COVID-19 pandemic. And yet, von der Leyen’s 2022 address lacked any reference to the EHU. How Europe approaches health and well-being has a broad societal impact, and the pandemic highlights the importance of a healthy population and the link between the environment and people’s health. Addressing citizens’ mental health needs is essential in promoting a healthy population, so at least the president’s announcement of a mental health initiative is welcomed.

The momentum for discussions about health at the EU level often fades fast once the worst of a crisis has passed. Considering the permacrisis the EU is facing, increasing the resilience of European healthcare systems by preventing medicine and vaccine shortages, securing supply chains and delivering sustainable and affordable medicines must continue to be a priority.

The EHU is not yet a reality as not all of its proposals have been adopted at this stage. The review of the Pharmaceutical Strategy for Europe – an important building block of the eventual EHU – must not be subject to delays. Doing so threatens the likelihood of delivering the Union before the 2024 European Parliament elections, which would be to the detriment of EU citizens.

Everyone expected a SOTEU speech big on symbols and energy security announcements, and so it was. The presence of the First Lady of Ukraine, Olena Zelenska, and two Polish activists welcoming refugees, Magdalena and Agnieszka, marks a turn to more of an American-style State of the Union address where stories and images are centre stage. That is probably a good thing if this yearly message from the EU’s executive is to reach citizens across Europe.

On energy, President von der Leyen announced mandatory savings, caps on prices and revenues, deep energy market reform and gas negotiations with Norway. As the EPC has already argued, these forceful measures are needed if Europe is to make it through the coming winter. They also open another chapter in the story of a steadily more geopolitically minded EU executive, developing strong tools to intervene and act in markets and crises.

At the same time, the Commission president’s speech was too light on other major geopolitical tests, such as European defence and digital security. Digital security could well become the next focal point of international confrontation. Nobody wants a 2023 SOTEU where cyber resilience is the top agenda point, so the EU must prepare now.

Finally, as part of the Commission’s geopolitical priority, the focus on corruption in Europe and abroad is commendable. But von der Leyen forgot one crucial element: protecting EU decision-making itself. The EU has strong powers to investigate financial fraud, but not democratic. The EU Transparency Register should now be given investigative powers to counter hidden lobbying and undue interference.

The support the European Policy Centre receives for its ongoing operations, or specifically for its publications, does not constitute an endorsement of their contents, which reflect the views of the authors only. Supporters and partners cannot be held responsible for any use that may be made of the information contained therein. 

Photo credits:
European Union 2022

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