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As Ursula von der Leyen peers out of her window on the 13th floor of the Berlaymont building in Brussels, she wouldn’t be blamed for taking the dark December days as an omen for the EU’s situation.
Pro-European parties have suffered repeated setbacks since the EU elections in June. The elections resulted in a divided European Parliament with a right-wing shift, complemented by a far-right surge in national elections in France and the Netherlands. A slowing Franco-German motor is now stalled by the breakdown of the German coalition. The EU faces a deteriorating geopolitical environment with an escalating war in Ukraine, war in the Middle East, simmering tensions in the South China Sea, and an incoming Trump administration that puts Brussels on a collision course with the White House over trade, defence and China.
For a deeper look at how Trump-era US trade policy is reshaping global competitiveness and supply chains, read ‘The Trump Effect: How US trade policy is reshaping global supply chains and competitiveness
Amidst this gloomy picture von der Leyen (VDL) reigns supreme in a divided Union, emerging as the biggest winner of the EU transition period. Despite some doubts about her reappointment in early 2024 following criticism of her positioning in the Israel-Hamas conflict, the former German Defence Minister comfortably secured her re-election as Commission President by the European Parliament in July and, somewhat less comfortably, that of her new College of Commissioners in November.
The EU is a political entity with a weak centre, VDL knows this, and to handle the headwinds she has concentrated power into her hands. Her team of commissioners includes fewer political heavyweights capable of counter-balancing her influence. Moreover, her power is augmented by weak governments in key Member States (France, Germany, Spain). These factors give her the possibility of becoming the most powerful Commission President since Jacques Delors.
But VDL stands on shakier ground than Delors. The “von der Leyen coalition” in the European Parliament composed of the European People’s Party (centre-right), the Socialists & Democrats (centre-left) and Renew Europe (centrist liberals) has a slim majority, while the hard-right nationalist groups of the European Conservatives and Reformists (ECR), Patriots for Europe (PfE) and Europe of Sovereign Nations (ESN) now represent a quarter of seats. The parties supporting VDL have committed to working together but tensions are palpable, as could be seen during the recent hearings. The shift to the right of many national delegations within the EPP, and the increasingly central role played by Giorgia Meloni’s ECR Group, will tempt the EPP to seek alternative right-wing majorities without S&D and Renew – as shown during a recent vote on deforestation. It is possible that VDL’s coalition will break down in 2-3 years or find itself impaired, unable to agree on ambitious legislation. Similarly, in the Council, the EU’s two largest economies France and Germany are paralysed by lame duck governments – the latter until a parliamentary election in late February. More broadly, European politics is shifting right, with 8 out of 27 national governments currently involving or backed by hard-right parties.
The priorities of a VDL II Commission have consequently shifted right. Her first mandate was about the “twin (digital and green) transition”, her second: competitiveness and security.
Von der Leyen will use Mario Draghi’s report as her guiding light to reboot the EU’s flailing economy, to “turbocharge” investment (“this will be an investment commission”) to finance the “green, digital and social” transition, aiming to attract an extra €470bn in public and private investments per year by completing the Capital Markets Union, rebaptised the “Savings and Investment Union”. She will present big ticket initiatives such as a “Clean Industrial Deal”, a “European Competitiveness Fund”, all of which combined with a new focus on deregulationand enforcement that she will try to reconcile with her commitment to finsalising the EU’s ambitious green agenda known as the Green Deal, which includes a 90% emission-reduction target for 2040.
On security, support for Ukraine remains top of mind, intertwined with the EU’s own welfare (“the best investment in European security is investing in the security of Ukraine”, VDL reminded in her political guidelines) especially in the context of an incoming Trump administration. We will see an unprecedented number of initiatives to help Europe’s defence sector including working with the EIB to channel more investment, providing visibility for private companies through a joint investment and production plan, improving NATO/EU and national/EU coordination, and potentially but harder, easing Single Market & competition rules for defence contracts. The White Paper on the Future of European Defence that Commissioner Andrius Kubilius will publish by end of February 2025 will give the Commission its marching orders. She will present a “Preparedness Union Strategy” with recommendations to make the EU more cyber-resilient, inspired by Sauli Niinistö’s report. Migration will also be an important priority, with tougher rules on irregular and “instrumentalised” migration. Finally, the VDL II Commission is likely todouble down on strategic autonomy, its economic security doctrine and pursuit of European technological sovereignty, which could further aggravate tensions between the EU and US, and especially between the EU and China. Will VDL be able to pass ambitious policies in this mandate? It will be difficult. The centre holds in EU policies – but for how long remains unclear.
Donald Trump’s return to the White House as of January 2025 will be the dominant theme of the new Commission’s first months in office, impacting not just trade and Ukraine/NATO policy, but also the EU’s climate ambition and plans on big tech enforcement. While claiming they are fully prepared, senior Commission officials are scrambling to develop a strategy. They have already approached the Trump transition team to mitigate what is expected to be a destabilising impact, including on unity among Member States. A first orientation debate takes place in Brussels amongst the newly appointed Commissioners on 11 December, giving VDL mere days to decide on a policy strategy before Donald Trump’s inauguration.
How the EU responds to Trump and how it implements the competitiveness overhaul recommended by Draghi will depend on its ability to pass ambitious policy. On this front too, von der Leyen and the EU face an uphill battle. Three scenarios can be imagined.
The Commission’s first annual work programme should be presented in mid-February 2025. This will give us a first indication of von der Leyen’s ambitions – but the hard part will be what comes after that.
Dark clouds gather above the VDL II Commission, but there are three reasons to be cheerful.
First, VDL’s centralisation of power may make it possible to get something done in the absence of agreement or instructions from national leaders, opening up a space for the Commission take a larger portion of initiative from the hands of national leaders. Her attempt to push through the Mercosur Trade Agreement without France’s backing could be an early example – if it passes in the Council.
Second, the election of a stable German government with a new Chancellor in late-February, could revitalise the Franco-German-Polish diplomatic alliance known as the Weimar Triangle and help advance the EU’s security and defence agenda, with the support of the UK as a strategic partner outside of the EU.
Third, the EU’s resilience in a crisis has always been underestimated. As seen during the eurozone crisis, Brexit, the war in Ukraine and its response to the COVID-19 pandemic, the EU is capable of projecting itself into a leadership role when it senses danger is near. But the stakes are high, and no one in Brussels, nor in national capitals, knows yet whether the EU will have what it takes.
Thomas Grandjouan is a Director in Flint’s Brussels office and coordinated Flint’s EU2024 offer. To find out more about how Flint can help you navigate the risks and opportunities of these developments, get in touch.