A few days ago, the President of the European Commission, the German Ursula von der Leyen of the European People’s Party, delivered the State of the European Union Address (SOTEU) before the plenary session of the European Parliament in Strasbourg.
The SOTEU marks the start of the new European political year and sets the Commission’s policy priorities—as the Union’s de facto executive power—for the following twelve months. The debate also provides political groups in the European Parliament with a valuable opportunity to define their own positions and shape the agenda according to their priorities.
Political Priorities
The address reaffirmed the two core pillars that have defined the von der Leyen Commission since its inception: sustainability and digitalisation. The first is being pursued through the European Green Deal, the flagship policy package designed to achieve climate neutrality by 2050 and reduce emissions by 55% by 2030.
In this regard, the “Fit for 55” package, published in July 2021, stands out. It consists of 13 new legislative proposals or legal reforms, including the expansion of sectors covered by emissions trading (alongside a reduction in available allowances), the introduction of a carbon border adjustment tax, and significant cost increases for vehicles with combustion engines.
The other major priority is digitalisation. The Commission’s two main proposals in this area are the Digital Services Act (DSA) and the Digital Markets Act (DMA), both published in December 2020 and now under negotiation in the Council and Parliament. The DSA introduces horizontal regulation for all online intermediary services, modernising the outdated 2000 E-Commerce Directive.
The DMA, by contrast, has a narrower scope. It will impose additional obligations on companies meeting the criteria to be designated as “gatekeepers”—those whose market dominance creates barriers to entry for smaller competitors. Fewer than ten companies in Europe are expected to meet these criteria, pending final negotiations between the Council and Parliament.
In the remaining two and a half years of the current legislature, President von der Leyen will seek to complement her political legacy with new initiatives, including a European Defence Union, a review of competition policy, and the creation of a biomedical agency to prevent future health crises—all announced during this year’s SOTEU.
The Context
The drafting of the SOTEU is always influenced by the political circumstances of the moment. This year, one event overshadowed all others: the upcoming German federal elections, which could dramatically reshape Europe’s political chessboard—and, by extension, the balance of power underpinning Brussels’ stability.
A Social Democratic victory—or even a Green-led government—would mean the European People’s Party (EPP) losing its most prized seat of power, held since 2005 when Angela Merkel succeeded Gerhard Schröder. With the other major European capitals governed by liberals (France), socialists and the left (Spain), and a technocratic government backed by a broad parliamentary majority (Italy), the EPP would find itself in an almost unprecedented position.
This shift could have at least two major consequences in Brussels. First, the term of European Parliament President David Sassoli, a Social Democrat, ends in January 2022. According to the agreement reached among the main political families after the 2019 elections, the next presidency should go to the EPP. However, a resurgent Socialist bloc—with control of Berlin and Madrid, but only the High Representative for Foreign Affairs within EU institutions—will be reluctant to give up this visible and symbolically important position.
Second, a potential breakdown in cooperation between conservatives and socialists over the distribution of top EU posts could have serious consequences for the von der Leyen Commission. Led by a conservative German with two Executive Vice-Presidents—one Social Democrat (Frans Timmermans) and one Liberal (Margrethe Vestager)—the Commission could face gridlock in Parliament and Council, as well as renewed questions over von der Leyen’s leadership. The road to 2024 looks fraught.
Spain
The Spanish government appears relatively insulated from the political turbulence north of the Pyrenees. To the uncertainty of the German elections is added France’s upcoming presidential race in April 2022, where President Emmanuel Macron faces a crucial political test.
This leaves a European landscape with a new German government still in formation, a France in campaign mode, and an Italian government, as usual, balancing on a tightrope of internal fragility.
In this scenario, Spanish Prime Minister Pedro Sánchez’s repeated intention to complete his full term through late 2023 makes strategic sense. His influence in Europe could grow for two reasons: first, a strong Social Democratic result in Germany would reinforce his party’s position continent-wide; and second, the combination of German coalition talks, the French campaign, and Italian instability means Brussels will increasingly look to Spain as a source of political stability and a key partner.
This may help explain the close cooperation between von der Leyen and Sánchez during the Afghan crisis last summer, which even brought the European Commission President to Madrid.
Conclusions
The situation described points to at least three foreseeable outcomes:
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A slowdown in EU legislative activity, given growing political fragility in the executive and rising polarisation within the co-legislators.
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Few major European initiatives are likely over the next year, as Germany, France, and Italy turn inward.
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Spain’s role will grow in importance—Sánchez needs Europe to strengthen his position at home, and Europe needs Sánchez to remain stable.
A marriage of convenience, but one both sides will depend on.
