First 100 days highlight prospect of a historic EU term

The action-packed first 100 days of Ursula von der Leyen’s second five-year term as president of the European Commission suggests that the remainder of it could be one for the history books.
Not only is the situation exceptionally turbulent in a global context, domestic reforms are also urgently needed on the continent.
Von der Leyen’s first term in charge of the commission, from 2019 to 2024, was defined by her responses to the pandemic and Russia’s invasion of Ukraine, and her European Green Deal, which made Europe the first major power to legislate for climate neutrality by 2050.
Fast forward to 2025, and the pace of events is still lightning fast but the macro landscape is not exactly the same as it was before.
Perhaps inevitably, it is foreign policy that has dominated the headlines so far. Not only is the EU seeking to influence the terms of any eventual Ukraine peace settlement, but on the world stage von der Leyen is also leading efforts to boost European outreach to key emerging markets such as the Gulf Cooperation Council, South Africa, the Mercosur bloc in South America, and India. At the same time, she is coordinating the EU response to Donald Trump’s presidential blitz, including the “Liberation Day” trade tariffs he announced on April 2.
By any standards this is a huge, and fast-growing, international policy agenda to tackle. So far, von der Leyen has not only agreed a EU-Mercosur trade deal and restarted trade talks with India, she has also announced major new defense and security initiatives, including the multibillion-euro “ReArmEU” plan. Now, she is thinking through signature initiatives for her second term, which runs until 2029.
Every commission president seeks to leave a mark on the bloc’s economic and political trajectory through era-defining initiatives. Perhaps the one who left the biggest political footprint in relatively recent times was Jacques Delors. In the late 1980s and early 1990s, he oversaw the creation of the single market initiative and laid the foundations for the European single currency.
However, Delors was far from alone among commission presidents in attempting to make such historic waves. In 2000, Romano Prodi’s “Lisbon strategy” sought to transform Europe into the world’s most competitive knowledge-based economy. Jose Manuel Barroso led the Europe 2020 growth plan. And Jean-Claude Juncker spearheaded an investment plan for Europe.
It is in this historical context that von der Leyen’s second term is now unfolding. While the foreign arena is important for this, she is also very mindful of the EU’s multiple domestic weaknesses. These were highlighted last year in a landmark report by Mario Draghi, the former Italian prime minister and ex-European Central Bank chief. He called for a new European industrial strategy to address an “existential” competitiveness challenge, and offered about 170 recommendations to that end.

The action-packed first 100 days of Ursula von der Leyen’s second five-year term as president of the European Commission suggest that the remainder of it could be one for the history books. 

Andrew Hammond

Draghi advocated that the EU raise investment by €800 billion ($879 billion) a year to fund huge, and fast, changes to help prevent the 27-member union falling further behind key competitors. This additional annual investment, equivalent to about 4.5 percent of EU gross domestic product, would bring the ratio of investment-to-GDP to a level not seen since the 1970s.
In short, he suggested that three macro themes must be tackled. Firstly, closing the innovation gap between the EU and other key economies, with special emphasis on commercializing and scaling up innovation, including in the field of digital technology. Draghi viewed artificial intelligence as an opportunity “to redress these failings in innovation and productivity, and to restore its manufacturing potential.”
The second major theme was the combination of decarbonization efforts with growth to boost competitiveness. Draghi and von der Leyen want a continuing shift from fossil fuels toward a cleaner, circular economy, but assert that this must ultimately result in a lowering of energy costs, to translate the benefits into economic gains for industry and consumers.
The report highlights the fact that the cost of energy for industry is significantly higher in the EU compared with the US: 158 percent higher for electricity and 345 percent for natural gas.
Thirdly, in the deteriorating geopolitical context there is a growing need to derisk supply chains, including those for raw materials and wider critical minerals, in an effort to build resilience to future shocks following the effects of the pandemic and Russia’s invasion of Ukraine. Simultaneously, European defense industry capacity requires an urgent boost.
Von der Leyen has started to tackle some of this agenda through initiatives such as the EU-Mercosur trade deal and the ReArmEU defense and security plan.
Her key domestic initiative, however, looks likely to be the potentially important new Clean Industrial Deal. Unveiled in February, in outline form, it recognizes that the EU cannot afford to lose a critical mass of its industrial base, and economic prosperity, in pursuit of bold climate goals.
The announced €100 billion package pools existing funds in an attempt to revitalize the EU’s clean manufacturing sector. EU climate chief Wopke Hoekstra hinted the initiative could align with broader net-zero goals and that the initial €100 billion sum aims to leverage €400 billion through private funds, though such projections hinge on market response and lack a firm deadline.
With lingering uncertainty about the full details of the plan, what is already clear is that the scale and ambition of the €100 billion in committed public funds are relatively modest when compared with investments by the US and China.
The figure also falls far short of heeding the warning in Draghi’s report last year that the EU needs to invest about €800 billion annually to close the innovation gap and remain competitive.
Therefore this important new EU strategy still risks falling short, which could put a significant dent in von der Leyen’s broader political legacy. Without even greater ambition, Europe will struggle to fully realize its Clean Industrial Deal goals.

• Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.