NFU Blog

SOTEU 2022 – Strong on symbolism, weak on substance – at least for Nordic and European financial industry and its employees

Commission President Ursula von der Leyen held her annual State of the Union address on 14 September. These are NFU’s take aways.

Commission President Ursula von der Leyen pointed out right at the beginning of yesterday’s speech, this time there was also a novelty: it was the first SOTEU to be held while a war was being waged on European soil. She held the SOTEU in the presence of Olena Zelenska, the wife of Ukrainian President Volodymyr Zelenskyj and in blue-and-yellow dress – the colours of both the EU and Ukraine – as strong symbol of solidarity with Ukraine. Russia’s war on Ukraine and questions of energy consumption, joint energy storage and energy dependencies were the leitmotif of this year’s SOTEU. Ursula von der Leyen combined concrete proposals for emergency measures, such as an EU excess profit tax on energy companies’ energy with long-term market reforms to overcome the dependency on fossil fuels. Concretely she referenced the REPowerEU programme and establishment of a European Hydrogen Bank and the investment of 3 billion euros in the development of a hydrogen market. Climate policy or new up-coming legislation of the climate package didn’t however make it into this year’s SOTEU. She also announced a review of the late payment directive in order to prevent insolvencies due to late payments.

For the digital and green transformation to succeed, however, it is not only the EU that must invest, but also the member states – which brought von der Leyen to the reform of the Stability and Growth Pact and the EU’s economic governance. In October, the Commission will present new proposals on this, of which von der Leyen for the time being only revealed some slightly cryptic “basic principles”: The Commission wants to give member states more flexibility to invest, but at the same time increase accountability for the implementation of agreed targets. In practice, this could mean that member states will be allowed to more easily incur debt, but only in order to finance investments that the EU also considers sensible.

Unexpected but widely supported during debate was Ursula von der Leyen’s commitment to a European Convention to follow the Conference on the Future of Europe. The Commission President surprisingly announced “the moment has arrived for a European Convention.” Apart from reform of the EU fiscal framework, Ursula von der Leyen’s announcement seems to fall into Place with German chancellor Olaf Scholz Praque speech, in which he had already described the connection between institutional reforms and European integration. Von der Leyen now explicitly taking up the same argument is indicative of a new tone in the reform debate: Institutional reforms are no longer seen as just a whim of EU federalists, but as an indispensable prerequisite for future enlargements.

Anna Delia Papenberg
EU Coordinator at NFU

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