The annual State of the Union (SOTEU) address – the European Commission President’s flagship speech to the European Parliament – took place this morning at 9am in Strasbourg, with Ursula von der Leyen setting out her vision for one of the most challenging years the European Union has faced.
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In her wide-ranging address, European Commission President Ursula von der Leyen outlined a series of initiatives aimed at tackling Europe’s social, economic and environmental challenges while strengthening competitiveness and independence. A central theme was the revision of state aid rules to allow governments to invest more in affordable housing, described as critical for Europe’s workforce and social fabric. Von der Leyen emphasised that Europe must also position itself as a leader in artificial intelligence and clean technologies, proposing new legislation, funding instruments, and AI gigafactories to strengthen Europe’s digital and industrial base. She linked climate policy to industrial policy, promising new trade measures for steel and support for batteries, renewables, nuclear and circular economy solutions.
Political reactions
Manfred Weber, speaking on behalf of the centre-right European People’s Party (EPP), underlined that key recent advances – including the return regulation, sanctions packages and the omnibus simplification package – are the direct result of the centre-right majority in Parliament. “We will continue to deliver concrete results,” Weber said, stressing that the autumn will be a moment of truth, with responsibility serving as the guiding principle.
Weber confirmed the EPP’s support for an EU-US trade agreement, arguing that the alternative would be a damaging trade war. He also defended the Mercosur deal, acknowledging its unpopularity but insisting that rejecting it would push South America into China’s orbit. On industry, he warned that European sectors are in decline and called for technology-neutral innovation and stronger digital investment. He also recalled broad support for the Draghi agenda, while criticising the Socialists for rejecting the omnibus package designed to cut red tape.
Iratxe García, speaking for the Socialists and Democrats, questioned Europe’s direction and ambition, asking bluntly, “Where is Europe?” She criticised the EU’s response to US tariffs, highlighting that accepting 15% duties without retaliation was unacceptable, and condemned energy spending commitments that support fossil fuels. García also slammed the handling of trade agreements, citing the Scotland discussions, and called for Europe to invest strategically in the Green Deal and defence.
Turning to foreign policy, she demanded stronger EU action on Gaza, where she said famine is being used as a weapon and journalists are being killed. “Thousands of children have died in a massacre perpetrated by the Israeli government,” she said. While welcoming recent EU measures on Israel, García insisted it was too little, too late. She concluded that social democracy, equality and justice must remain at Europe’s heart, declaring, “This is Europe our citizens deserve.”
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Ursula von der Leyen warned that “disinformation poses a serious risk to society,” stressing that an informed citizens are essential to hold those in power to account.
She cautioned that “democracy itself is increasingly under threat,” noting that autocrats “always seek to undermine and control independent voices.”
To counter this, the Commission President announced the launch of a new Media Resilience Programme to defend media independence and invest in media literacy. She also pledged to “significantly boost support for private media,” underlining that “a free press is the backbone of democracy.”
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Social priorities are also prominent: the Commission pledged to eradicate poverty by 2050 and introduce a “Quality Jobs Act” to address the cost-of-living crisis. Financial and market integration will advance through the Savings and Investments Union, a digital euro and a Single Market Roadmap with clear deadlines.
Key points of the second part of her part include:
- Revise state aid rules to support affordable housing.
- Housing crisis threatens competitiveness and quality of life.
- Europe must build AI capacity to stay competitive.
- New AI legislation and gigafactories planned.
- Climate policy linked to industry for stronger growth.
- Support for steel, batteries, renewables, and nuclear confirmed.
- Commitment to eradicate poverty by 2050 reaffirmed.
- “Quality Jobs Act” to ensure fair wages and better work.
- Digital euro launch to simplify payments.
- Single Market Roadmap to remove internal barriers.
- Savings and Investments Union to deepen capital markets.
- Boost for startups through new funding and scaling rules.
- Circular Economy Act to strengthen recycling and resource security.
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More assertive Europe and major shift on Israel
Against the backdrop of Russian drones crossing into EU airspace and a humanitarian catastrophe unfolding in Gaza, von der Leyen pledged a more assertive and less bureaucratic Europe, seeking to convince citizens that Brussels can act with urgency on the issues that matter most.
Von der Leyen announced that military mobility will now be added to the list of sectors benefiting from omnibus bills designed to cut red tape and speed up decision-making. Military corridors, including rail and trucking routes to transport supplies, will be prioritised to strengthen Europe’s defence capabilities. She also mentioned further initiatives covering digital policy, emphasising that reducing bureaucracy is essential if Europe is to remain competitive and create jobs.
The Commission President also annnounced a major shift on Israel. Condemning what she called a “man-made famine” in Gaza and denouncing efforts to “undermine the two-state solution,” von der Leyen announced the suspension of bilateral payments to Israel, while preserving support for Holocaust remembrance projects and Israeli civil society. She confirmed that the Commission will propose sanctions on extremist ministers and settlers in the West Bank, alongside a partial suspension of trade aspects of the EU–Israel Association Agreement. Members on the left on the left of the hemicycle applauded vociferously, while members of the far-right jeered.
Von der Leyen also revealed plans for a “Reparations Loan” tapping into the €200 billion of immobilised Russian assets held in Europe. The scheme would allow Ukraine access to funds immediately, to be repaid only once Russia is forced to cover post-war reparations. While some governments remain sceptical about the legal and financial risks, von der Leyen argued the urgency of the war demanded bold solutions. Alongside this, she confirmed work is underway on a 19th package of sanctions against Moscow, targeting fossil fuels, shadow fleets and third-country evasion.
Von der Leyen promised a “European Defence Semester” and pledged further support for frontline states through an “Eastern Flank Watch,” including potential funding for a regional drone wall. She also unveiled the Qualitative Military Edge programme to help Ukraine modernise its armed forces, positioning Kyiv as Europe’s first line of defence.
Key points:
Military mobility simplification: A new omnibus bill to cut red tape and speed up transport of supplies through dedicated military corridors, including rail and trucking routes.
Expansion of simplification drive: Further omnibus packages to cover digital policy and other sectors, aimed at reducing bureaucracy for businesses.
Israel funding suspended: Bilateral EU payments to Israel put on hold, excluding support for Holocaust remembrance and Israeli civil society.
Sanctions on Israeli officials: Commission to propose measures against extremist ministers and settlers in the West Bank, plus a partial suspension of trade aspects of the EU–Israel Association Agreement.
Reparations Loan for Ukraine: Plan to tap into €200 billion of frozen Russian assets to provide immediate financing for Ukraine, to be repaid once Russia covers post-war reparations.
19th Russia sanctions package: New measures in preparation targeting Russian fossil fuels, the shadow fleet, and circumvention through third countries.
European Defence Semester: Announcement of a new coordination mechanism for defence, with details to follow at the next European Council.
Eastern Flank Watch: Financial support for frontline EU states, including investment in a regional drone wall and funds for countries buying Ukrainian weaponry.
Qualitative Military Edge programme: New initiative to bolster Ukraine’s military capabilities through EU investment.
Focus on cost of living: Recognition that inflation and soaring prices remain a top priority for Europeans alongside defence and security.
Earlier:
Expectations are high. In a panel discussion on the eve of the address, European Parliament Vice President Nicolae Ştefănuţă (Greens/EFA, Romania) warned that Europe faces “many crises at once” – from heatwaves to rising public debt – and said enlargement must be treated as “now or never.” He called for closer ties with Moldova and Ukraine, stronger social policies and investment in housing, and insisted that “spending on security does not mean cutting social affairs.”
Vice President Katarina Barley (S&D, Germany) underlined the urgency of the EU budget debate, stressing the need to balance climate, Ukraine, and competitiveness while keeping citizens’ trust. “Europe must show it improves people’s lives,” she said, adding that defending Europe’s digital laws against potential US pressure will be key.
Vice President Martin Hojsík (Renew, Slovakia) said Europeans want a stronger Union able to project power globally. He flagged climate change as an existential issue, noting that “we spent more on fossil fuels from Russia than we gave to Ukraine,” and called for tougher enforcement of EU laws, particularly in the digital sphere.
