Is Von der Leyen Delivering a Competitive Europe?

Welcome, Net Zero News readers,

As we delve into the evolving landscape of European competitiveness under the leadership of Ursula von der Leyen, it’s essential to reflect on the promises made and the progress achieved in the past year. With the recent shift from the Green Deal to a focus on competitiveness, the European Commission has embarked on a transformative journey aimed at revitalising the continent’s economy. Let’s take a closer look at how this ambitious plan is unfolding and what it means for the future of Europe.

In her inaugural address nine months ago, President von der Leyen outlined a bold vision for a more competitive Europe, signalling a significant pivot from prior environmental priorities. This shift was largely in response to critical reports from former Italian Prime Ministers Enrico Letta and Mario Draghi, which highlighted the need for a comprehensive strategy to enhance the EU’s economic standing. The urgency of this initiative was further underscored by global economic pressures, including the challenges posed by the recent political climate in the United States.

As a result, the Competitiveness Commission was established, with a clear mandate to steer the EU’s economic policy for the next five years. This article will explore the key initiatives introduced since then, evaluate their implementation status, and assess the overall impact on Europe’s economic future.

Competitiveness Compass

What VDL said: “I can announce that the first major initiative of the new Commission will be a Competitiveness Compass. This will frame our work for the rest of the term.”

How it’s going: The Competitiveness Compass was indeed the first official initiative launched by the Commission, albeit two weeks later than anticipated due to von der Leyen’s health concerns. The Compass aimed to outline the Commission’s strategic focus areas, including reducing bureaucratic red tape and addressing soaring energy prices. However, the lack of concrete proposals within the Compass has left many in the business community disappointed. An analysis by the European Policy Innovation Council revealed that only a fraction of the suggested measures from the accompanying Draghi report have been implemented so far.

Score: Needs Improvement

Closing the Innovation Gap

What VDL said: “We will ensure that our small companies, our startups and scale-ups, can thrive here in Europe.”

How it’s going: Despite the Commission’s flurry of proposals aimed at fostering innovation and supporting startups, the reality is that bridging the gap in Europe’s tech sector is a long-term endeavour. The Commission has laid out various strategies to position Europe as a leader in cutting-edge technologies, including artificial intelligence and quantum computing. However, industry stakeholders are eager for actionable results, particularly as the Commission prepares to introduce a harmonised set of corporate rules intended to facilitate growth for startups across member states.

Score: Promising but Needs Acceleration

Clean Industrial Deal

What VDL said: “We will put forward the Clean Industrial Deal within the first 100 days of the mandate.”

How it’s going: The Clean Industrial Deal was launched as promised, but much of its content remains aspirational at this stage. The focus has largely been on securing funding mechanisms, including a new state aid framework and a Competitiveness Fund. However, the pressing need for a concrete strategy to stimulate demand for environmentally friendly products remains unaddressed, alongside the industry’s critical request for lower energy costs.

Score: On Paper Only

Strategic Dialogue on the Future of the Car Industry

What VDL said: “Together we have to make sure that the future of cars will continue to be made in Europe.”

How it’s going: The strategic dialogue initiated by von der Leyen aimed to ensure the automotive sector’s competitiveness, but tangible outcomes have been limited. While discussions have focused on emissions targets and the creation of a European battery sector, the automotive industry has found itself revisiting concerns regarding emissions standards rather than moving forward with innovative developments.

Score: Stalled Progress

Reducing Energy Costs

What VDL said: “We have done a lot to respond to Russia’s energy blackmail and the high inflation that followed. But the price of energy has to go down further.”

How it’s going: Unfortunately, energy prices remain high, challenging the Commission’s ability to deliver on this critical promise. Although efforts have been made to create a comprehensive energy strategy, the desired outcome of significantly reduced energy prices has not materialised. The ambitious proposal to cease gas imports from Russia by 2027 could reshape the energy landscape, but immediate relief for consumers and industries is still awaited.

Score: Unmet Expectations

Free and Fair Trade; Reinforcing Economic Security

What VDL said: “We know that overdependencies can quickly turn into vulnerabilities […] We need free and fair trade to diversify our suppliers [of critical minerals].”

How it’s going: In comparison to her first mandate, von der Leyen has made strides in trade negotiations, particularly concerning critical minerals. The Commission successfully concluded agreements with resource-rich countries, signalling progress in diversifying supply chains. However, legislative efforts aimed at enhancing economic security are still in the works, with the need for a comprehensive strategy becoming increasingly apparent.

Score: Progressing but Needs Focus

Critical Medicines Act

What VDL said: “[Health Commissioner] Olivér Várhelyi will lead our work on biotechnologies and his first priority will be the Critical Medicines Act.”

How it’s going: The Critical Medicines Act has made relatively swift progress, with the framework being established within the initial months of the Commission’s term. However, the absence of a thorough impact assessment has raised concerns among various stakeholders, potentially hindering further development and adoption of the policy.

Score: On Track but Needs Depth

Competitive Circular Economy

What VDL said: “We have paid the price for putting our future in the hands of a single supplier. And we will not make the same mistake again.”

How it’s going: The commitment to fostering a circular economy is clear, yet the implementation of concrete actions has lagged. The Commission’s plans for enhancing recycling and reusing materials are promising, but industry calls for additional support to bolster recycling capabilities have yet to be adequately addressed.

Score: Needs More Concrete Actions

White Paper on the Future of European Defence

What VDL said: “Our defence spending must increase. We need a single market for defence. We need to strengthen the defence industrial base.”

How it’s going: The Commission’s efforts in the defence sector have yielded mixed results. While significant funding has been proposed for military mobility, the overall budget falls short of what experts believe is necessary. Additionally, the ambition for a cohesive defence market faces resistance from member states, complicating the path towards a unified strategy.

Score: Mixed Results

A Simpler, More Focused and Responsive Budget

What VDL said: “This will have to be an investment Commission. But our budget is often too complex … We must be much more focused on investing in our priorities.”

How it’s going: The proposal for a new seven-year budget has introduced a more streamlined approach, aimed at enhancing the flexibility of EU funding. However, regions express concern over the potential power shift towards national capitals, questioning whether the new budgetary framework will truly benefit local economies.

Score: Early Days, but Potential for Improvement

A European Savings and Investments Union

What VDL said: “We urgently need more private investment. This private capital gap is the main reason we lag behind on overall R&D spending, and thus on innovation.”

How it’s going: The initiative is still in its infancy, but the Commission is working diligently to promote private investment in the EU. The success of these efforts will depend on citizens’ willingness to invest and member states’ responsiveness to the Commission’s calls for reform.

Score: Potentially Promising

A New Omnibus Legislation

What VDL said: “We need to streamline our rules to reduce the burden on businesses.”

How it’s going: The Commission’s push to simplify regulations has sparked both praise and criticism. While the intention is to ease the regulatory burden on businesses, it has raised concerns about bypassing democratic processes and creating uncertainty across various sectors.

Score: Controversial but Necessary

Make Business Easy Across Europe

What VDL said: “We need to get back to what the Single Market does best. And make business easy across Europe.”

How it’s going: The Commission’s efforts to enhance the Single Market are commendable, with increased funding aimed at dismantling barriers to trade. However, further progress is needed to address lingering obstacles and create a truly seamless market for businesses across the EU.

Score: Progressing but Needs Momentum

Strategic Dialogue on the Future of EU Agriculture

What VDL said: “We must ensure that our farmers and fishers have a fair and sufficient income.”

How it’s going: While the EU has made promises to support farmers, the reality is that many continue to rely heavily on subsidies. The Commission’s initiatives to reform agricultural funding are still in the early stages, with little concrete action taken to ensure sustainable income for producers.

Score: Needs Significant Improvement

Pact on Migration and Asylum

What VDL said: “I promised an approach to migration that is both fair and firm.”

How it’s going: The proposed migration pact has yet to be fully implemented, facing significant scrutiny and calls for more stringent measures. While efforts have been made to increase border control, the balance between security and fairness remains a contentious issue.

Score: In Progress

Enlarging the EU

What VDL said: “The dream of Europe extends to the Western Balkans, to Ukraine, to Moldova and beyond…”

How it’s going: The aspirations for EU enlargement are hampered by political complexities, particularly concerning Hungary’s opposition to Ukraine’s membership. Frustration among Western Balkan nations is growing as they feel sidelined in favour of more recent applicants.

Score: Efforts Not Matched by Results

In conclusion, while there have been strides made under von der Leyen’s leadership towards a competitive Europe, the journey is fraught with challenges. The EU must ensure that its initiatives are not only ambitious in scope but also actionable and effective in delivering real benefits to its citizens and industries. As we move forward, it will be crucial to maintain a balance between competitiveness and sustainability, ensuring that the future of Europe is both prosperous and environmentally responsible.

Thank you for being part of this vital conversation on Europe’s path to competitiveness. Together, let’s continue advocating for a sustainable future.