What Happened?
In July 2019, the European Parliament narrowly approved German Defense Minister Ursula von der Leyen as the European Commission’s first female president. The vote was 383-327, meaning von der Leyen barely exceeded the threshold of 374 votes needed to win. Her narrow victory will hamper her ability to command a broad majority in favor of her policy agenda.
How Did We Get Here?
As a reminder, von der Leyen was the compromise candidate chosen by European leaders behind closed doors, rather than running in the election campaign as a lead candidate for one of the parties.
Von der Leyen has been in a marathon series of meetings over the past two weeks — with different political groups, national and EU leaders, and individual MEPs. In the end, many MEPs from the pro-EU majority coalition of center-right (EPP), center-left (S&D), and liberal (Renew Europe) parties defied their respective groups’ official endorsements to vote against her in the secret ballot. It seems she won in part due to the support of populists and Euroskeptics from Poland, the Czech Republic, Hungary, and Italy, as well as at least a few Greens (despite that party’s official rejection of her candidacy).
Von der Leyen made promises to appease as many groups as possible in her bid to win the presidency — most notably ramping up the EU’s climate targets and supporting an EU-level digital tax if there is no OECD agreement by the end of next year. She also calls for strengthening a “balanced and mutually beneficial” partnership with the U.S. More on her policy proposals are below.
Why Does It Matter?
As President of the European Commission, von der Leyen will lead the EU’s policy agenda for the next 5 years. She’ll need to work hard to hard to build majorities, looking to the Greens to support her climate agenda, the social democrats on her social policy agenda, and the liberals and center-right for her economic agenda.
What’s Next?
For the next several weeks, EU member-states will propose candidates for Commission slots. Some of these candidates already are known, though they’ve not been assigned portfolios. The European Parliament will hold confirmation hearings in September. The Parliament must confirm or reject the Commission in its entirety. Practically, if they oppose a candidate, MEPs generally pressure a country to nominate someone else to avoid voting down the entire slate.
In theory, the EP will have voted by October 31, allowing the new Commission to assume office on November 1. In reality, increased fragmentation in the Parliament could well delay the outcome by at least a few weeks, if not longer.
Von der Leyen’s Proposed Policy Measures
Against what she perceives as the twin threats of Chinese authoritarianism and American protectionism, von der Leyen’s vision calls for a more assertive Europe. She wants to move ahead on a defense union, strengthen Europe’s competitiveness in the digital economy, and focus as much on enforcement of existing trade agreements as negotiating new ones.
Given Europe’s growing anxiety over globalization, demographic change, and fears of digitalization—she will have her work cut out for her. Following are highlights of her proposed policy agenda.
Environment Policy:
- Codify EU’s climate neutrality by 2050
- Increasing carbon reduction target from 40% by 2030 to 50-55%.
- Impose a “Carbon Border Tax,” which will prove controversial within Europe and could violate WTO rules
- Review Energy Taxation Directive
- Invest in transition to low carbon economy using cohesion funds, regional funds, and funds from the European Investment Bank
Economic and Tax Policy and Equality:
- Complete Capital Markets Union
- European Deposit Insurance Scheme
- EU minimum wage
- EU-wide unemployment benefits reinsurance
- EU-wide digital tax if there is not an OECD solution by the end of 2020
- Binding pay-transparency measures for gender equality
- Promote gender balance on company boards
Digital Policy:
- Pan-European standards for 5G networks
- Legislation on “the human and ethical implications” of AI, in her first 100 days
- Increased R&D to promote European leadership in the digital economy
- Complete the Digital Single Market, including a new “Digital Services Act”
- Digital Education Action Plan
Trade and Foreign Policy:
- Update/reinforce WTO system
- Conclude trade talks with Australia and New Zealand
- “Balanced and mutually beneficial” partnership with the U.S.
- Include sustainable development chapter in all future trade agreements
- Appoint a new “Chief Trade Enforcement Officer”
- Open EU accession negotiations with Albania and North Macedonia
- Move to qualified majority voting on foreign policy (popular with the European Parliament but not with the Council)
Brexit:
- An ambitious future partnership with the U.K., based on the existing Withdrawal Agreement
- An extension of the Article 50 negotiating period if the U.K. offers “good reasons,” like a general election or second referendum
- Note: With the U.K. currently scheduled to leave the EU on October 31, von der Leyen’s most immediate challenge upon taking office will be dealing with the fallout of a “no-deal” Brexit
Defense Policy:
- Measures to ensure “Europe will stay transatlantic and become more European”
- Strengthen European Defense Fund to support R&D initiatives
European Institutional Affairs:
- Right of initiative for the European Parliament to propose legislation, a major shift since today this is the prerogative of the Commission alone
A notable absence in her policy declaration is any reference to the Franco-German proposal to revise European competition and industrial policy to explicitly defend European companies. Still, it’s important to underline that von der Leyen’s policy announcements represent only a starting point as the Commission plans for its next term.
