European Commission President Ursula von der Leyen used her annual EU State of the Union address (video, transcript) on September 10 to reaffirm the bloc’s commitment to Ukraine, signal a tougher stance on Israeli settler violence, and outline reforms designed to sharpen Europe’s competitiveness in an era of heightened geopolitical rivalry.

“"Europe is you. Europe is us!” she told the delegates as she took the floor for the annual address. The principal elements of her speech were clear in advance: calls to stand firm against Russia, support for Ukraine, and an accelerated pace of EU militarization, with particular emphasis on digital technologies and AI-based systems.

Von der Leyen also voiced support for continuing the green transition, although since her alliance with right-wing parties that secured her re-election for another five-years on the job earlier this summer, she has downgraded the green drive, which no longer stands at the Commission’s core ideological agenda.

She also mentioned the need for a “European Democracy Shield” that will support the free press which will receive more EU funding.

“In some communities across Europe, traditional media are struggling,” she said. “In many rural areas, the days of going out for a local paper is a nostalgic memory. This has created many news deserts where disinformation thrives. And this is very dangerous for our democracy.”

US trade deal

She defended her recent trade deal with the Trump administration where she accepted a broad 15% tariff on European goods exported to the US, but left EU markets open to American imports.

"The deal provides crucial stability in our relations with the US at a time of grave global insecurity," she told MEPs to a lukewarm reception.

In addition, she agreed to a non-binding commitment to increase energy imports from the US to €250bn a year – a deal that some analysts have called delusional. She justified her deal as a necessary compromise to avoid a full blown trade war with America and argued that “other countries pay more.”

However, she drew a line in the sand over the next potential flash point with the White House: Trump's threat to impose extra tariffs in retaliation for the EU's €2.95bn antitrust fine on Google.

"I want to be crystal clear on one point: whether on environmental or digital regulation, we set our own standards, we set our own regulations," she said. "Europe will always decide for itself."

Ukraine support

Speaking before the European Parliament in Strasbourg, von der Leyen said that “the war needs to end with a just and lasting peace for Ukraine. Because Ukraine's freedom is Europe's freedom”, vowing continued military support, financial aid and humanitarian assistance.

The EU is currently working on a nineteenth sanctions package that may include secondary sanctions on Russia’s partners for the first time. Europe also aims to accelerate the phase-out the import of all Russian fossil fuels by the end of 2027.

"We need more pressure on Russia to come to the negotiating table. We need more sanctions," she added. "We are particularly looking at phasing out Russian fossil fuels faster. We're looking at the shadow fleet and at third countries."

The EU has been spurred into proposing the idea after the coalition of the willing Paris summit on September 4 ended in disaster, when US President Donald Trump demanded the EU threaten China and India with 100% tariffs if they don’t stop buying Russian crude oil.

She also ruled out the recent discussion on the possibility of confiscating Russia’s $300bn of frozen assets, that was also discussed in Paris. However, she suggested that they could be “leveraged” to provide a new special loan to Ukraine. Some have suggested the assets can be invested in riskier asset classes to earn more money, but if the investments go bad the liability of the losses will fall on EU members. "The assets themselves will not be touched, and the risk will have to be carried collectively," she said, diffusing calls for confiscation.

She also said that the EU will enter a Drone Alliance with Ukraine, which has developed an advanced technological proficiency in drone manufacturing, as part of a new programme, the “Qualitative Military Edge” that will support investment in the capabilities of the Ukrainian armed forces.

More generally she recommitted the EU to her ReArm programme to bolster Europe’s defence sector (since renamed Readiness 2030) on March 4. The programme, “could unlock up to €800bn of defence investment. This includes the SAFE programme that is now ready to provide €150bn for joint procurement. 19 Member States have already applied and is already at full capacity,” she said.

Gaza measures

Turning to the Middle East, von der Leyen struck a careful balance, stressing that “the war in Gaza must stop” while describing herself as “a friend of Israel” and condemning Hamas for its role in triggering the conflict.

But she took an open dig at Israel’s policy of starvation and its persistent blocking of humanitarian aid to the strip. "Man-made famine can never be a weapon of war" she said.

She announced that the EU will impose sanctions on violent Israeli settlers and said the bloc would partially suspend its EU-Israel Association Agreement, with a focus on trade — though details of the suspension remain to be clarified, particularly whether it will affect trade preferences or diplomatic forums.

Anticipating push back from Israel’s allies she added: "I am aware it will be difficult to find majorities. And I know that any action will be too much for some. Too little for others. But we must all take our own responsibilities: Parliament, Council and Commission."

Competitive reforms

Von der Leyen commissioned the Draghi report last year, which found that the EU had fallen behind the likes of the US and China and recommended investments of a whopping €800bn a year to just stay in the game.

The Commission will propose a "Made in Europe" criterion for public tenders to "drive demand for European industrial leadership in clean tech".

While that spending commitment has become lost in the cacophony of the need to increase defence spending to 5% of GDP and invest a similar €800bn that von der Leyen outlined in her ReArm speech (video) on March 4, the president did outline a number of reforms to improve competition. “We like competition in Europe” she told the assembled lawmakers. She laid particular stress on the need to invest into AI development, however, Europe continues to lag badly behind the US in technology and innovation, according to Mario Draghi, the former Italian Prime Minister and author of the report.

Amongst the new programmes are measures to deepen the capital markets union, accelerate investment in green technologies, strengthen digital infrastructure, and reduce regulatory burdens.

Eastern Flank Watch

Von der Leyen also addressed the Russian drone strike that hit Polish territory earlier in the day, an incident that has raised alarm about the vulnerability of the EU’s eastern flank.

"Just today, we have seen a reckless and unprecedented violation of Poland and Europe's airspace by more than ten Russian Shahed drones. Europe stands in full solidarity with Poland," she said, prompting applause in the chamber. "Europe stands in full solidarity with Poland.”

Poland is seeking to trigger Nato’s Article 4 after the military reported at least 19 incursions by Russian drones into Polish airspace in the early hours of September 10, Prime Minister Donald Tusk told the parliament as the country woke up to the shock news of what looked like a Russian drone attack. Article 4 is similar to the collective defence Article 5, invokes consultations with Nato allies if a country feels is security is threatened and does not necessarily lead to a military response.

Von der Leyen announced plans for a new joint European “Eastern Flank Watch” and a “drone wall”, though it remained unclear whether this would take the form of a supranational EU military force, which would be a first, or a coordinated, EU-financed coalition of national units. “Our citizens expect us to defend Europe together, not separately,” she said.

“We must invest in real-time space surveillance so that no movement of forces goes unseen. We must heed the call of our Baltic friends and build a drone wall. This is not an abstract ambition. It is the bedrock of credible defence,” she said.

Unanimity to majority voting in the EU

The President also broached another thorny topic: switching from the current system for the need of unanimity on all EU votes to a simple majority rule.

Von der Leyen called on the block to free itself from "the shackles" of unanimity on foreign policy decisions, as the current system gives every one of the EU’s 27 members an effective veto over any decision.

She promised closer cooperation with the pro-European and increasingly right-wing majority that backed her re-election last year. European People's Party (EPP), the Socialists & Democrats (S&D), the liberals of Renew Europe and the Greens, was "the only majority that can deliver for Europeans" at a time of multiple challenges coming in "different forms" and from "different directions".

"I will always be ready to bridge differences and find common ground," she told them.

Unity over the support for Ukraine has cracked and Hungarian Prime Minister Viktor Orban has repeatedly used his veto to block decision. Indeed, he has placed preventing Ukraine’s EU accession bid at the core of his current re-election bid and the other members of the union are powerless to overcome it.

EU foreign policy chief and former Estonian Prime Minister Kaja Kallas has suggested a Plan B to bypass Hungary’s objections that includes stripping Hungary of its voting rights, but that idea has not gained much support amongst EU member states.

Von der Leyen argued that unanimous voting prevents the bloc from quickly responding to challenges and formulating effective solutions at a time when Europe feels itself to be under threat from a Russian invasion.

"We must move to qualified majority voting in certain areas, including foreign policy. It is time to get rid of the practice of unanimous voting. We must allow the EU to act faster and achieve results," von der Leyen emphasized as quoted by RIA Novosti.

In July, EU countries could not agree on the adoption of the eighteenth sanctions package of anti-Russian sanctions. On June 23, Hungarian Foreign Minister Peter Szijjarto reported that Hungary and Slovakia did not support its introduction. According to him, the reason is that the restrictions will oblige states to refuse to use Russian natural gas and oil, which is disadvantageous for Bratislava and Budapest, among others.