The state of the European Union needs some work.
European Commission President Ursula von der Leyen did her best to rouse the 27-country bloc with a stirring September 10 state-of-the-union speech, which drew generally good reviews, smatterings of applause, and periodic booing from the European Parliament in Strasbourg. Even the constructive criticism pulled no punches. “She knows what the challenges are for Europe, but is lacking on results,” said Kathleen Van Brempt, a Belgian member of the European Parliament from the Vooruit party in the Socialists and Democrats (S&D) alliance.
The juxtaposition of reactions shows the bind von der Leyen is in: lead boldly, but not too much. Take the hits you can absorb and carry on. Paris and Berlin are preoccupied with their respective domestic crises. To improve “the state of the union,” Brussels has no choice but to try to step up.
The Silence of the Capitals
For now, as von der Leyen put it in her opener, “Europe is in a fight.” The war in Ukraine drags on and Kyiv’s financial needs are growing. Relations with the United States are dicey. Barriers within the single market remain high, budgets are overstretched, and economic output is modest at best: The European Central Bank currently predicts eurozone gross domestic product will grow just 1 percent in 2026, sliding up to a modest 1.3 percent for 2027. All of these areas require attention and collective action for the EU’s fortunes to improve.
Soaking up the legislative heckling was the easy part. Von der Leyen knows that the speechifying pageantry is as much for her to hear lawmakers’ frustration as for her to weigh in, and she handles that part of the job well.
More challenging negative energy comes from the silence of the capitals. France is caught up in yet another domestic crisis while Germany wrestles with its budget. The Netherlands is paralyzed until it can scrape together new elections. Italy’s Giorgia Meloni, in office since October 2022, may be the big-country European prime minister with the most current gravitas. When the road to stability leads through Rome, which has seen 70 governments over the last 77 years, European politics has hit a new milestone of political perpetual motion.
A Bid for Stability
Against this backdrop, Von der Leyen faced the unenviable task of wrangling a trade compromise out of an increasingly belligerent US administration that was threatening to impose 30-percent tariffs on most European goods. In August, she signed off on a deal that limits the US tariffs to “only” 15 percent, even as the EU reduces its own bilateral tariffs to zero. The pact has been widely viewed as both humiliating and necessary, given that the Europeans still require US support for operations in Ukraine.
At best, the deal she struck can be seen as a “solid but imperfect” bid for stability, as the European Commission chief said herself in a rare newspaper column. European consumers will pay lower tariffs than if the EU had tried to retaliate. At least some of the economic uncertainty may fade. Yet soothing US President Donald Trump remains one of von der Leyen’s top jobs, to prevent further eruptions over digital policy and to keep behind-the-scenes work on track even when rhetoric veers wildly.
Public Insults, Private Peacekeeping
At late September’s United Nations General Assembly in New York, Trump railed that world leaders were “destroying” their countries while blasting the “useless” nature of the global forum. But European leaders kept their smiles pasted on and tones light, and behind the scenes seem to have secured renewed US support for Ukraine, possibly with increased NATO backing.
Once again, von der Leyen led the European charm offensive, sitting with Trump for a dramatic portrait and letting his energy-policy insults slide. French President Emmanuel Macron followed her lead, using his meeting with Trump to call for cooperation instead of pushing back against what he publicly referred to as the UN’s “harshest critics.” Macron may be battling protests and shuffling his government at home, but at least he showed up.
German Chancellor Friedrich Merz, on the other hand, stayed at home in Berlin rather than risk any additional conflict with German parliamentarians. On the one hand, Merz deserves kudos for braving Berlin budget orthodoxy with a spending-heavy plan to jumpstart Europe’s biggest economy. On the other hand, his plan as proposed risks running afoul of EU budget rules, or re-consolidating so quickly as to spur a new round of economic devastation, or both.
As long as Merz remains so caught up in domestic affairs, he is unlikely to find a new burst of pan-European leadership momentum. Germany seems likely to remain focused on its own red lines, leaving von der Leyen no choice but to step into the void.
There’s no other serious candidate to be the public face of EU solidarity. European Council President António Costa so far has focused on preparing the bloc’s periodic leaders’ summits, in a presumed attempt to model the quiet efficacy of previous officeholder Herman Van Rompuy rather than the ineffective bluster of predecessor Charles Michel.
Mario Draghi, the former European Central Bank president and technocrats’ favorite source of clarion calls, emerges periodically to repeat the economic case for investing in competitiveness. But as Draghi himself found out during his tenure as Italian premier, electoral politics is a different game than central banking. It’s not enough to have a good rationale and a monetary transmission channel. The EU has to get, and justify, the votes.
Rebuilding Trust
That’s where von der Leyen comes in. As her second mandate picks up steam, the European Commission chief has to somehow strengthen and simplify the European bureaucracy to meet the many challenges ahead. The EU has largely finished its initial era of institution-building and framework establishing; its next task will be to help these achievements mature into better and more effective—but not necessarily bigger—government bodies. Even if the EU’s next seven-year budget expands, it still will be unable to address all the obstacles in Europe’s way. Meaningful change requires action by member states.
This action has at least two main components: national reform and European trust. Part of why Europe retains so many internal barriers and roadblocks is because member states do not trust each other, either to implement common rules or to allow EU-wide frameworks to do their jobs.
When citizens and businesses complain about the European bureaucracy, they are complaining at least as much about national deviations as they are the community requirements themselves. Their frustration with the European Commission, too, can only partly be explained by the plethora of new initiatives rolling out of the Brussels machine. For any of those new plans to become reality, they must survive a gauntlet of national scrutiny and European parliament add-ons.
Piling on Is the Point
Yet the piling on is the point. The European Parliament was created to bring more populism to the European project, and offer a more direct line of accountability to voters than prior channels. It makes sense that these lawmakers want to leave their stamp on new legislation, even if that democratic initiative comes with a large helping of extra paperwork. Likewise, national governments remain beholden to their citizens, so ministries have an understandable incentive to make sure their Brussels representatives look out for local stakeholders.
To build something better, national and European lawmakers need to confront their own structural biases and figure out better ways to compromise. To the extent EU regulations are as detailed and burdensome as they can be, it is because stakeholders chose those rules to make up for a lack of trust that shared goals could be achieved in other ways.
To simplify, Europeans need to trust each other to reach the same destination via different paths. Entrenching divergence as permanent and inevitable will not have the same results. For example, it is unacceptable for Europe to resign itself to inadequate pension systems in perpetuity, even as it is unworkable for all countries to use a single tax and benefit model. Future reforms need to be clear on necessary outcomes like investment opportunities and financial security, without trying to micromanage payroll deductions, accounting procedures, or bank disclosures.
Europe needs to set standards, and countries need to meet them—and trust their neighbors to do so as well. That means cutting back on so-called gold-plating, or setting national requirements in addition to the EU norms. Once European officials, lawmakers, and parliamentarians agree on what a rule should look like, national governments should maintain their support rather than undermining the joint agreement with hosts of deviations. The payoff will be a large economy that can grow faster than the sum of its fragmented parts, raising living standards for all.
There are signs for hope amid the chaos. Bulgaria is set to join the euro area on January 1, 2026, continuing the forward path it has followed from communism to EU member to full participant in the Schengen border-free area. The EU continues to support Ukraine and, for now, continues to work constructively with the US despite the tariff and regulatory brouhaha.
In Brussels, the European Commission is keeping the faith. It won’t be easy, but von der Leyen is giving member states reasons to remember why the European project is still worth improving. While countries dither over how fast and how far to go, the institutions that have been built so far will serve as example of what can be done, and hopefully motivation for what needs to happen next.
Rebecca Christie is IPQ’s Brussels columnist and a senior fellow at Bruegel, the economic think tank.
