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Von der Leyen outlines EU priorities in a subdued State of the EU speech

Author: ICAEW Insights

Published: 16 Sep 2021

European Commission President Ursula von der Leyen delivered her second ‘State of the European Union’ speech this week, outlining flagship initiatives for the Commission in the coming year. Susanna Di Feliciantonio, ICAEW Head of European Affairs, considers the key takeaways.

While shorter on new announcements than last September’s set-piece speech to the European Parliament, von der Leyen took the opportunity in Strasbourg to reflect on a challenging 12-month period, highlighting both successes and shortcomings, while box-ticking EU priorities for the year ahead. 

‘Investing in short-term recovery and long-term prosperity’ – With the financial crisis serving as a cautionary tale against restricting public spending too early, von der Leyen outlined how EU recovery funds are being used to address immediate needs as well as structural issues across different EU countries. Without providing any detail, she also touched upon the need to build consensus on reforming the EU’s fiscal rulebook.

‘It’s warming. We’re sure. It’s bad’ – The EU may have turned climate goals into legal obligations and presented comprehensive legislation to back up its objectives, but it remains dependent on action by the global community. Hence, von der Leyen’s call on Beijing and Washington to come forward with concrete plans before the COP26 meeting. To help the chances of success in Glasgow, she pledged an additional €4bn until 2027 to close the climate finance gap on top of the EU’s annual $25bn contribution towards climate mitigation and adaptation in the least developed and most vulnerable countries. EU external funding for biodiversity will also double. Closer to home, a new Social Climate fund will help tackle the energy poverty already facing 34 million Europeans. 

‘There is no digital without chips’ - As the single market approaches its 30-year milestone, its digital dimension preoccupies the Commission. For von der Leyen, this means accelerating investment in the EU’s own tech sovereignty. Central to this ambition will be a new European Chips Act. Citing the success of the EU’s Galileo global navigation satellite system, von der Leyen pledged to create a new ecosystem for semiconductors, including production in the EU to ensure security of supply.

‘Social fairness is a question of fair taxation’ – If companies make profits thanks to the quality of the EU’s infrastructure, social security and education systems, then they should be paying the right amount of tax according to von der Leyen. She promised to spare no efforts in helping to secure the OECD global tax deal while pointing to forthcoming legislation to tackle the abusive use of shell entities. 

‘Europe needs all of its youth’ – In addition to a heartfelt plea to all national capitals to accelerate digital up-skilling, von der Leyen announced a new programme, mirroring the Erasmus scheme, to enable young Europeans to find temporary work experience in another EU country.

‘A new era of hyper-competitiveness’ – Following events in Afghanistan and against a backdrop of rising regional rivalries, von der Leyen’s speech was heavy on security and defence. Appealing to EU governments to gather their political will, she called for a joint European situational awareness centre to facilitate collective decision-making. The EU also needs to improve interoperability and waiving VAT on defence equipment developed and produced in Europe could help this. Noting that if everything is connected, everything can be hacked, von der Leyen wants to see a European cyber defence policy, including common standards under a new EU Cyber Resilience Act. 

‘Creating global links and not dependencies’ – In an implicit comparison with China’s Belt and Road Initiative, von der Leyen committed that the EU’s new connectivity strategy – the Global Gateway – will take a values-based approach, working with the banking and business communities. The Commission will also propose to ban the sale of products made by forced labour in the EU. 

‘A pandemic is a marathon, not a sprint’ – Given the EU’s known difficulties in initially securing vaccines, von der Leyen was keen to stress Europe’s now high vaccination rates and successful EU digital certificate while acknowledging worrisome divergences across the EU27. She noted the need to speed up global vaccination and pledged to donate another 200 million doses by mid-2022, on top of the 700 million doses already delivered to around 130 countries. Von der Leyen also proposed a new health preparedness and resilience mission for the EU, to the tune of €50bn by 2027, alongside a new European care strategy. 

‘Finding common ground on managing migration’ – Tackling one of the most difficult items on the EU’s agenda, von der Leyen called on MEPs and national capitals to speed up the process to determine a European migration management policy. 

‘Protecting the rule of law is hard work’ – In wrapping up her speech, von der Leyen expressed the Commission’s unwavering determination to defend common European values. Without mentioning Poland or Hungary directly, she stressed the right for any European, whether belonging to a majority or minority, to be treated equally before the law. The defence of individuals’ freedoms also sits behind a forthcoming draft law to combat violence against women as well as a Media Freedom Act, to be published next year. Referring to corruption, von der Leyen also vowed to pursue every case of fraud against the EU budget.

More detail on the legislative and non-legislative initiatives announced in the State of the European Union speech will follow next month when the Commission publishes its 2022 work programme. 

Commission President von der Leyen’s speech is available here

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