New Geopolitical Context and EU Strategy In her speech to the European Parliament on 22 January 2025, Commission President Ursula von der Leyen emphasized the onset of a new era of intense global geopolitical competition. She outlined that despite unchanged European values, the EU must adapt its strategies to protect those values effectively. Her remarks focused on strengthening Europe's economic position as a strategic imperative.
Concrete Policy Framework President von der Leyen unveiled the upcoming "Competitiveness Compass," a policy initiative scheduled for release the following week. This strategy translates the recommendations of the Draghi report into actionable steps over the next five years, setting three measurable goals: closing the innovation gap with global competitors, creating a roadmap that balances decarbonization and competitiveness, and enhancing economic resilience and security.
On innovation, she stressed coordinated public investment alongside increased private sector engagement, noting Europe's recent 10% rise in industrial R&D investments exceeding those in the US and China. The plan includes launching a European Savings and Investment Union aimed at generating new investment products and incentives, thus facilitating greater capital flow for startups and innovation.
Energy affordability was another focal point. Von der Leyen highlighted Europe's persistently high and uneven energy costs, proposing a comprehensive affordable energy plan in February. This includes investing in emerging clean energy technologies, modernizing grid and storage infrastructure, and removing regulatory barriers to deepen the Energy Union, which signals a move to increase EU-level coordination and regulation in energy markets.
Strengthening Economic Resilience and Trade Partnerships To address supply chain vulnerabilities and resource dependencies, she noted recent trade agreements with Mercosur, Mexico, Switzerland, and ongoing talks with Malaysia as part of a strategy to diversify sources of critical materials and expand markets.
Stakeholder Impact - EU Businesses, particularly in technology and clean energy sectors, may face increased regulatory coordination but also benefit from enhanced access to capital and integrated markets. - Member State governments will be called upon for more coordinated public investment and policy alignment, potentially challenging national sovereignty in economic policymaking. - Consumers could see benefits from more affordable energy but may experience transitional costs from infrastructural investments. - Foreign trade partners, including the US and countries involved in new agreements, stand to engage in deeper economic relations while navigating Europe's principled yet pragmatic negotiation stance.
The speech thus projects a shift toward increased EU-level policy integration, more regulation in energy and innovation sectors, and a balance between market competitiveness and strategic autonomy.
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