On 18 July 2024, Ursula von der Leyen, the current President of the European Commission (“Commission”), was reconfirmed by the European Parliament for a second term. Ahead of her reconfirmation, President von der Leyen delivered a speech before the European Parliament, accompanied by a 30-page program (the “Guidelines”) that lays down the next five-year policy agenda she proposes for the Commission. This blog outlines the key points to look out for in the “mission letters” she is expected to issue to her Commissioners-designate later this week.
A European “Christmas Tree”
The Guidelines were designed to secure a majority in the European Parliament ahead of the crucial 18 July vote. They affirm that the “priorities set out draw on […] consultations and on the common ideas discussed with the democratic forces in the European Parliament” (a reference to the cordon sanitaire – the agreed common exclusion of far-right parties from political discussions).
However, whilst the Commission has the monopoly on the right of initiative in EU law-making, the European Council (the strategic body that comprises the EU heads of state and government) defines the general political direction and priorities of the European Union. Hence, the European Council is the ultimate agenda-setter. At their 27 June 2024 meeting, the European Council agreed on a draft 2024-2029 Strategic Agenda (“Strategic Agenda”). This sets in stone the European Council’s policy priorities and invites the Commission to put these “into action during the next institutional cycle”. Thus, the Strategic Agenda acted as the basis upon which Von der Leyen prepared her Guidelines.
Other workstreams also influenced the drafting of the Guidelines. Enrico Letta’s report on the future of the EU Single Market advocated for the Commission to propose the establishment of the European Savings and Investments Union. Mario Draghi’s report on competitiveness (published on September 9, 2024) also fed into the Guidelines. Finally, the Guidelines seek to establish a sense of continuity, allowing von der Leyen’s second mandate to build on her first, notably with regards to the Green Deal: “we have achieved a lot together in the last five years, […] we must and will stay the course on all of our goals, including those set out in the European Green Deal”.
The Guidelines’ High Political and Legislative Relevance
Von der Leyen’s 2019 program announced the flagship initiatives her Commission adopted in the last five years: from the Green Deal to the Digital Services Act (“DSA”), and the reform of the EU’s economic governance system. The 2024 Guidelines too will steer her second Commission’s legislative work. Hence, they are of high political relevance.
Ultimately, the Guidelines are translated into concrete action in the “Work Program” the Commission publishes each year. This Work Program is a comprehensive description of the work the Commission has planned for the upcoming year with a rough timeline for when it expects to make legislative proposals and issue non-legislative documents (e.g. action plans, strategies, guidelines). It also estimates when evaluations of existing legislation against the Commission’s regulatory fitness and performance program will take place.
The Guidelines will be referenced in each Commissioner’s Mission Letter. Whilst Commissioners are appointed by their respective Member State, their portfolios are determined by the Commission President. Hence, Mission Letters serve to delineate the scope of a Commissioner’s portfolio and, in turn, the administrative services (DGs) under their leadership.
A Brief Sectoral Deep Dive
The Guidelines propose the adoption of a wide range of new EU policies. On the competition front, the Guidelines discuss a potential new “European Competitiveness Fund” dedicated to industrial policy. Such a centralised fund would simplify the procedural access to public funding and streamline the process to designate “Important Projects of Common European Interest” (“IPCEI”). IPCEI are large cross-border projects financed by four or more EU Member States to overcome market failures or social challenges and to create positive spillover effects on the EU economy.
The Guidelines call on the Commission to (i) increase its enforcement of the DSA and the Digital Markets Act to safeguard competition and consumer protection online and (ii) develop a new economic foreign policy to promote and defend European economic interests amidst growing geopolitical tensions. As part of its new economic foreign policy, the Commission proposes (amongst other things) a review of the foreign direct investment screening framework, a reform and strengthening of the WTO, enhanced trade defence instruments, and increased investment in the Global Gateway. Finally, the Guidelines simultaneously call for greater enforcement of the Foreign Subsidies Regulation and a relaxation of the EU’s own state aid framework. This could increase trade friction, as explained in Covington’s recent blog.
Meanwhile, the implementation of the Green Deal is likely to be a challenge under von der Leyen’s second term. A potential “Clean Industrial Deal” should seek to “focus on implementing the existing legal framework for 2030 – in the simplest, fairest and most cost-efficient way”. Adoption of secondary legislation (delegated or implementing acts, but also guidance) will prove crucial to the proper enforcement of existing rules. For instance, the Commission has yet to issue its draft sector-specific technical standards against which companies will have to report under the Corporate Sustainability Reporting Directive. Several crucial pieces of implementing legislation will also have to be adopted under the EU Deforestation Regulation.
In tech, the Guidelines announce ambitious measures. In its first 100 days in office, through a new “AI Factories initiative” (a concept that remains undefined), the Commission will aim to ensure that AI start-ups and other industry actors have access to the supercomputing capacity they need to scale. Further, the Guidelines stress the untapped potential of data: where European companies struggle to access data, large foreign companies fuel their business through easy access to vast amounts of data. The Commission seeks to level the playing field and boost European competitiveness by reforming the legal landscape and streamlining existing data rules. However, the Commission wants to do so while upholding high levels of security and privacy standards. This “European Data Union Strategy” illustrates the Commission’s ambition to shift EU tech policy from a regulation-driven to a more business-friendly approach to bolster European competitiveness. The Guidelines demonstrate a clear commitment to promote digital technology diffusion to enhance productivity, in line with the Strategic Agenda.
The Guidelines also emphasize the need to strengthen the EU budget to match the ambition level set out across the various policy areas. The Guidelines call for a reinforced EU budget, as the Commission is to put forward a draft EU long-term budget in 2025 (the Multiannual Financial Framework, “MFF”). This should set the stage for negotiations among Member States, expected to occur between 2026 and 2027.
Next Steps
After the designation of Commissioners’ portfolio by President von der Leyen, individual nominee hearings will take place in the European Parliament’s relevant Committees ahead of a vote in a plenary session – now likely to take place in November – to endorse the full College of Commissioners. That Commission is now expected to enter into office on December 1, 2024.
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The team at Covington, which cuts across a wide range of regulatory areas, is well placed to advise you on these policy developments, and how to engage with the relevant decision-makers on these questions.
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Clovis de Bryas of Covington & Burling LLP contributed to the preparation of this blog.