Highlights from the SOTEU23 : “Innovate, develop and manufacture”

Ursula von der Leyen delivered her annual State of the Union speech (SOTEU)  as Commission President on Wednesday, September 13, 2023.  

Von der Leyen has guided the European Union during her tenure as president, navigating through significant challenges such as the pandemic, the war in Ukraine, and energy and economic crises.  Given that the EU elections are just eight months away, and a new Commission will be appointed, the speech covered the achievements of the current Commission, outlined her vision and priorities for the EU,  as well as announced new initiatives that will still be launched during this mandate.

The focus is clearly on delivering a green and digital Europe and addressing the geo-political realities at play.  Health was addressed in this context, but surprisingly, given the link between the environment and human and animal health, did not address the need for a ‘One Health’ approach which the EU has signed up to. Von der Leyen made a strong call to invest in the competitiveness of the European economy, create jobs, and drive innovation to enable the green and digital transition in Europe.

Strategic autonomy and competitiveness versus third countries were also key topics of the address. Von der Leyen outlined the newly adopted legislative initiatives such as the European Green Deal, the Clean Transition Dialogue, the Net-Zero Industry Act, and the Critical Raw Materials Act and announced new regulatory initiatives including a European Wind Power Package, an anti-subsidy investigation into imports of electric vehicles from China and the launch of a series of Clean Transition Dialogues with industry to address the risks and needs of each industry sector. To underline the Commission’s commitment to a more competitive Europe, former Italian PM Mario Draghi has been asked to prepare a report on the future of European competitiveness. Mention was made to better support SMEs by focusing on making it easier to do business. The Commission plans to make proposals next month towards reducing reporting obligations by companies.

With innovation as a vehicle for competitiveness, significant attention was given to AI. Von der Leyen stressed the importance of implementing the AI Act as soon as possible. She also announced the launch of a global AI expert group that should help policymakers better understand the potential risks and benefits for humanity, with the intention to work together towards minimum global standards for the safe and ethical use of AI.

The initiatives outlined will have a substantial influence on various business sectors in Europe. Below is a more comprehensive summary.

EUROPEAN GREEN DEAL

Europe’s commitment to ambitious climate action was highlighted. Key elements of the Green Deal strategy were outlined:

• Adapting industries to a new environmental reality is a priority
• Continuing supporting European industries throughout the Green Transition
• Initiation of sector-specific clean transition dialogues
• Launch of an anti-subsidy investigation into electric vehicles from China
• Start of strategic dialogues on the future of agriculture in Europe
• Protection of biodiversity is essential in meeting the EU’s environmental challenges

STRATEGIC AUTONOMY AND SECURITY

Both these topics were addressed but did not take such a central role as in previous years. The need for Europe to strengthen its defense capabilities as well as to enhance its strategic autonomy through investments in competitive and innovative defense industries was emphasized.  She stressed the importance of supporting research and development in defense technologies and fostering European collaboration in various defense projects:

• Developing the EU into a “geopolitical union” able to stand up to Russia, responding to an assertive China, and investing in partnerships
• Calls for more engagement with Africa, and presenting a new strategic approach during the next EU – African Union Summit
• Keep the dialogue open with China for cooperation (de-risking, not de-coupling from China) with reference to the upcoming EU-China Summit later this year
• The first meeting planned for the new Critical Raw Materials Club
• Complete trade deals with Australia, Mexico, and Mercosur by the end of the year
• Take the Global Gateway program to the next level with the recently announced India-Middle East Europe Corridor
• Need for common European funding to support industry

DIGITAL

The speech focused heavily on artificial intelligence, its impact on society, and the need to regulate its risks. The Commission President reconfirmed Europe’s ambition to continue leading on protecting citizen’s rights in the digital world by making sure that the digital space is safe, making reference to the Digital Market Act (DMA), Digital Services Act (DSA), and the Artificial Intelligence (AI) Act.  The Commission now wants to work with its global partners to create a new global framework for AI, based on three pillars:

1. Guardrails: ensuring that AI is developed in a human-centric, transparent and responsible way
2. Governance: ensuring a global approach to understanding the impact of AI on societies by creating a global expert panel similar to the IPCC for climate
3. Guiding innovation: putting innovation at the center while working together towards global minimum standards for the safe and ethical use of AI

• Implementation of the DMA and the DSA will also be  of critical importance to ensure a safer digital space
• Ensuring Europe’s lead in critical and emerging technologies in the framework of Strategic Technologies for Europe Platform (STEP)

HEALTHCARE

The Commission president acknowledged that Europe has now set the building blocks for a Health Union, especially when it comes to vaccination. At the EU level, healthcare is increasingly integrated with other policy areas: digitalisation, environmental protection, economic growth, geopolitics, etc. It has become more and more crucial for the Commission to promote policies that have an impact horizontally – on healthcare and on other areas:

• Development of a Health Union, ensuring vaccination of the European population, and spearheading vaccination coverage globally during and after the acme of the pandemic
• Importance of new technologies and digitalization for the future of healthcare in Europe

• Need to foster de-risked supply chains of critical raw materials, which will be key for the healthcare industry
• Organisation of the EU Clean Transition to ensure EU industry plays an active role in reducing environmental harm