Unite, make & choose European: The State of the European Union 2025

Yesterday, on September 10, Commission President Ursula von der Leyen gave her annual State of the European Union (SOTEU) speech. In this speech, the President of the European Commission presents the EU’s course for the coming year and accounts to the European Parliament. This year there were few surprises or novelties, as the current Commission presented its 2024–2029 work programme only six months ago and in July the Multiannual Financial Framework. Nevertheless, Von der Leyen still announced a number of proposals that are policy-defining—not only for Member States, but also for business, governments and civil society organisations. Colleagues Adriane Schultz and Valérie Mendes de León were present at the speech and set out the most important announcements below.

1. Investments in the internal market

As opposed to five years ago, when the SOTEU revolved entirely around the Green Deal, this year it was about deregulation. Following the recently announced simplifications of existing legislation, Von der Leyen continued the line that Europe wants to increase companies’ room to manoeuvre. She proudly announced that the current omnibus proposals—proposals that merge existing laws and reduce administrative pressure—are expected to write off about €8 billion in bureaucratic burdens. Two other proposals:

• Internal market: Von der Leyen announced a Single Market Roadmap 2028 to remove internal barriers in the capital market, the telecom and energy sectors, and in knowledge and innovation. The IMF calculated that the current obstacles within the internal market are equivalent to a tariff wall of 45% on goods and even 110% on services. There is thus huge unutilized potential.
• Key technologies: she also addressed companies directly: Europe does not want fast-growing start-ups to turn towards American or Chinese capital. That is why there will be a Scaleup Europe Fund, worth multiple billions, intended to keep growth companies in key technologies such as AI, biotech and quantum in Europe.

Responses from industry stakeholders to the simplification announcements are mixed: although often positive about lowering administrative burdens, companies mainly crave clarity. The omnibus proposals will therefore particularly have to show that companies will not be subject to more changes, but that they can quietly continue with the implementation of legislative proposals.

2. Tech and clean energy: Europe’s investment bloc

Europe continues to invest in firepower in key technologies and clean industry. The message: “Choose Europe — and Europe chooses you back.”

• Tech: on Tech, the Commission is working on a Cloud & AI Development Act and a Quantum Sandbox—both with the aim of letting crucial technologies grow and develop on European soil. This must be realized through the construction of European AI “gigafactories” to train, develop and roll out models.
• Energy: in the field of energy, Von der Leyen presented Energy Highways, which must remove eight persistent bottlenecks in the European energy infrastructure to clear the way for truly affordable energy. The Commission also offers perspective by creating lead markets: markets where public and private demand for European clean products reinforce each other. On the one hand, by producing in Europe, via a “Made in Europe” criterion in public procurement. On the other hand, an incentive for partners to buy European. Von der Leyen also wants energy to come more from European soil, all in order to be able to compete with other countries.

The Commission is looking for companies that dare to invest in Europe right now. Although the Commission promises to choose European providers, practice shows that this is not always the case—an interplay that can still grow considerably.

EU–US trade relationship

Von der Leyen emphasised the importance of a trade relationship with the US and parried the heavy criticism of the concluded trade deal. Entirely in “Trump-style,” she stated that the current deal is without any doubt the best agreement. At the same time, she made it clear that the EU will always chart its own course, certainly in the area of digital and environmental rules, and decides for itself. She remained fierce on tariffs: “Tariffs are taxes.” According to Von der Leyen, the agreement is mainly about providing stability and predictability in a time of geopolitical uncertainty. However, it was also stated that Europe must look to other strategic partners and is currently working towards partnerships with Mercosur and India to reduce strategic dependencies.

Choose and make European

In her speech Von der Leyen mentioned a number of hefty financial investments. It seems a lot, but they fit with the ambitions of the Multiannual Financial Framework that was presented in July. Although this MFF only takes effect in 2028 and many of the ambitions will be realised in the relatively near future, this Framework is already being taken into account.

The State of the EU can be summarised as “choose and make European.” The EU wants to stimulate EU-grown production as well as the purchase and development of knowledge. For European companies it is therefore an opportunity to contribute to their realisation. At the same time, Von der Leyen showed that these investments will exist alongside the strong trade relationship with the US and new trading partners in Latin America and Asia. Precisely this dance in trade relations requires the Commission to provide clarity on what it expects from business.

Photo: Source EC – Audiovisual Service; © European Union, 2025