Autumn is typically a busy month for the EU policy agenda, and this year has not been any different, with significant developments set to shape the policy landscape. These are the primary issues I am closely following:
- Watch Item: New College of European Commissioners
Ursula Von der Leyen proposed a new College of 27 Commissioners focused on prosperity, security, and democracy. Noteworthy appointments include Teresa Ribera (Spain) as Executive Vice-President (EVP) for Clean, Just, and Competitive Transition, overseeing the Green Deal and competition issues. Henna Virkunnen (Finland) will take on a portfolio focused on Technology, Sovereignty, Security, and Democracy, while Stéphane Séjourné (France) will oversee Prosperity and Industrial Strategy. Despite this, the formation of the new College of European Commissioners has not been without controversy. Ursula Von der Leyen faced pushback from some Member States, and she did not achieve the gender balance she had sought. Former Commissioner for the Internal Market Thierry Breton’s last-minute resignation surprised many. The European Parliament typically rejects some nominations, so we can expect additional changes before the new College is fully formed. The new College will likely take office in December, with European Parliament hearings set to take place in November.
→ The coming months will reveal how the new College’s structure and political dynamics will shape the EU’s agenda, particularly regarding economic competitiveness and the industrial strategy.
- Watch Item: The Draghi Report, EU Reform, and Europe’s Competitiveness
Mario Draghi’s report, commissioned by the European Commission President, proposes a blueprint for the future of the EU’s competitiveness. It presents a unified approach to boost innovation, decarbonisation and security while reducing dependence on foreign powers. It calls for urgent steps to reverse declining productivity, aligning with Ursula Von der Leyen’s 2024-2029 political guidelines for the next European Commission. It seeks to address universal challenges, such as overregulation and the innovation gap. The Draghi report and Ursula Von der Leyen’s guidelines highlight the need for increased public and private investment in social, green, and digital transformations. While Draghi’s report has received mixed reactions—particularly around Single Market barriers—a group of 20 member states has called for further reform to eliminate these barriers, a priority echoed in Ursula Von der Leyen’s call for a horizontal Single Market Strategy. The proposed reforms will ultimately require efforts to overcome political inertia, a challenge that Mario Draghi and other observers have noted is a major hurdle within the EU’s current institutional framework.
→ The recommendations from Draghi’s report will feature strongly in the new legislative term, with the new EU Commissioners receiving clear direction from President Von der Leyen in their mission letters. European companies should prepare to seize opportunities within the EU as the focus on competitiveness intensifies.
- Watch Item: The Climate Agenda
In the wake of Climate Week NYC 2024, the Cambridge Institute for Sustainability Leadership has emphasised that the current approach to sustainability needs to shift from focusing solely on individual actions to advocating for broader market reforms. The sustainability challenge, they argue, requires stronger regulations and systemic changes rather than relying on individual industry efforts. As the climate agenda continues to evolve, many call for businesses to take a more active role in pushing for policies that can drive meaningful, long-term progress.
→ As corporate and political leaders respond to these challenges, the future of climate policy will likely demand bolder, systemic action.
- Watch Item: US Presidential Election
With the US election just weeks away, its outcome will have consequences for US-EU relations. A second Trump presidency could bring significant shifts in US foreign policy, including trade relations, NATO involvement, and support for Ukraine. At the same time, a victory for Kamala Harris will not necessarily mean a continuity from the current Biden administration’s policy.
→The outcome of the US election will significantly impact US-EU relations and set the tone for future geopolitical dynamics. Companies operating internationally should monitor risk exposure from any changes to EU-US relations.
- Watch Item: US-China Relations and Global Economic Impact
The growing divide between the US and China continues to impact global economic stability, particularly concerning climate policy and the green transition.
→ The ongoing US-China tensions require robust company risk management plans regarding supply chains and market dependencies.
- Watch Item: China-Africa Cooperation and the EU’s Global Gateway Strategy
The EU’s Global Gateway strategy, aimed at countering China’s Belt and Road Initiative, faces growing competition. The EU’s approach to international cooperation has evolved considerably in recent years, with geopolitical tensions fuelled by the COVID-19 pandemic, China’s rising significance and Russia’s war against Ukraine contributing to a shift that positions the EU’s global presence along geopolitical lines. The expansion of BRICS and shifting partnerships in Africa suggest that the EU may need to recalibrate its strategy to remain a relevant development partner in the region.
→ As the EU positions its global presence along geopolitical guidelines, European businesses should closely monitor evolving geopolitical developments which may affect market access and investment opportunities.
- Watch Item: Evolving Concept of Neutrality in Europe
Neutrality has swiftly become a more flexible and dynamic policy stance, precipitated particularly by Russia’s invasion of Ukraine. Middle East instability has also sharpened the focus on security. Former Dutch prime minister Mark Rutte faces a considerable challenge as he becomes NATO’s new secretary general: maintaining support for Ukraine without escalating tensions with Russia and preparing for the outcome of the US election.
→ European leaders will face increasing pressure to redefine their defence and security strategies, affecting businesses in the defence, technology, and energy sectors.
Navigating an Evolving Policy Landscape
The months ahead will be pivotal for businesses adapting to changing political, economic, and climate realities. Staying informed and proactive is essential for companies to build resilience and navigate continued uncertainty. Feel free to reach out for tailored advice.