State of the European Union 2026: Our Takeaways

Malte Zabel: Almost everything as expected

Ursula von der Leyen’s sixth State of the European Union address largely delivered what had been expected. There were few surprises, but some things nevertheless stood out.

The narrative 

Since her first term, Ursula von der Leyen has championed an EU that asserts itself as a capable, independent actor in an era of global upheaval. For several years, it has remained her central leitmotif and the rhetorical frame for her speeches.

The major themes 

Most of the key topics were known in advance – the economy, climate, AI, security, migration and social media. These issues dominated the speech – but the order and emphasis were noteworthy. Climate came second after the economy, receiving considerable airtime. In the wake of summer’s devastating events, the president was clear that climate action is not up for negotiation, despite pressure from parts of industry, far-right parties and sections of the EPP to scale back Europe’s ambitions. She devoted almost twice as much time to climate as to migration, where she offered comparatively little that was new.

The smaller themes 

Like the prominent emphasis on climate action – and the relatively brief section on migration – the “smaller” topics can be read as a conciliatory signal to von der Leyen’s strained governing coalition, particularly the S&D. She reaffirmed her commitment to the EU’s social pillar, criticised Israeli settlement policy and addressed Palestinian rights.

What she did not say

Von der Leyen said little about enlargement, EU reform, or the transatlantic relationship. No major initiatives in these areas had been expected. Even so, their near-total absence was striking, given how crucial all three are to her overarching vision of a geopolitically capable Union.

The first associate member state

Canadian Prime Minister Mark Carney, who was present for the speech, received special attention. There had been speculation that von der Leyen might propose a new Arctic security pact with Canada. But she went further. Canada is to become the EU’s first associate member state. How this will work remains unclear and raises many questions, but it was a remarkable moment.

Plenty of principle, few new initiatives 

Von der Leyen relied on familiar platitudes – “put people at the heart of AI” – and announced long-discussed measures, including the European security strategy, the Kids Act and the climate resilience plan. Genuinely new initiatives were few and far between. Rhetorically, the speech was only compelling when von der Leyen turned personal, such as her Kids Act announcement.

Still, the Commission President delivered a speech that remained true to her political identity. No one can accuse her of lacking a clear direction. She is staying the course. In an age of pervasive volatility, that should not be underestimated.

Claudia-Dominique Geiser: Single market integration – familiar promises, difficult delivery

This year’s State of the European Union speech felt like Groundhog Day on the single market. Ursula von der Leyen largely stayed the course, urging the co-legislators to deliver on the “One Europe, One Market” roadmap.

The roadmap’s measures to deepen the single market by the end of 2027 include proposals such as EU Inc. and the Market Integration and Supervision package. The president also promised a banking package.

Most of these proposals are based on the right diagnosis: European companies struggle to scale across borders and finance their expansion. Fragmented national requirements and capital markets hold them back. Nearly €10 trillion of Euro area household savings remain in bank deposits rather than capital market investments.

There is nothing wrong with staying the course, but there are two caveats. First, structural reforms take time to make a difference for companies, offering no quick fix for the struggling economy. Capital market reforms, for example, take years to deliver greater efficiency, depth and liquidity.

Second, ambition is essential. Member states praise single market integration, yet too often this fails to translate into their negotiation positions. In the EU Inc. negotiations, many Member States have opposed harmonised insolvency rules for innovative companies, even though these could facilitate cross-border investment.

To truly advance the single market, ambition must guide the negotiations. With reforms taking years to bear fruit, now is the time to deliver. Otherwise, next year’s speech will repeat the same promises against a bleaker economic backdrop.

Martin Hullin: Industrial AI as Europe’s technological edge, digital commons still a missing link

Ursula von der Leyen calls AI “the second tipping point of our times” and foundational for Europe’s society, economy and security. More European and efficient computing capacity is relevant to remain competitive, while staying superficial.

Compared to 2025, the position has shifted from situational awareness to concrete action. She lists the Tech Sovereignty Package, consisting of the Cloud and AI Development Act, Chips Act 2.0 and an Open Source Strategy, to address challenges across the entire tech chain. But overall not much news.

Von der Leyen mentions frontier AI risks and a coalition with Canada and the UK on model evaluation. Importantly, Europe finally identifies its unique selling point: industrial AI based on unleashed European data treasures (healthcare, transport, agriculture, manufacturing, defence, space) with human control at its core.

But a dilemma remains. While adversaries are named, Washington is not explicitly addressed, indicating hesitation to poke the bear – an interesting image with Mark Carney sitting metres away.

Narrative and operational connections between the elements were missing. Digital commons and infrastructure do not yet appear as a credible offer to global partners, while interoperability was only mentioned once in regard to defence. There was no explanation of whether dependencies are actually shrinking, especially as it is unclear who will own the planned data centres.

The speech shows clearer strategic direction and seriousness regarding digital risks and a European approach. The reference to declining cognitive sovereignty, with the example of a 14-year-old victim of online bullying that took her own life, marks a communicative red line that was first defended by PM Sanchez earlier this year. The announced EU KIDS ACT underlines increased scrutiny of social media platforms, possibly because of awareness that previous regulatory implementation has not made a true difference in protecting citizens.

Lucas Carvalho: Industrial AI is Europe’s best bet 

Von der Leyen said surprisingly little about the EU’s broader industrial strategy, but AI emerged as a clear priority. She argued that Europe needs its own AI strategy. Her message was clear – Europe does not necessarily need to win the race for the most advanced frontier models. The bigger question is how to extract the greatest economic value from AI by playing to Europe’s existing industrial strengths.

That leads her to a clear bet on industrial AI. Europe already has world-class industries, deep sectoral expertise and large pools of high-quality data. The strategic objective should be to turn Europe’s industrial strengths and data assets into an AI advantage, while ensuring that promising European startups have the public and private capital they need to scale.

To translate this idea into action, von der Leyen announced that the Commission will bring together governments, MEPs and industry around a new European dialogue on industrial AI applications in five strategic sectors: health, transport, food, advanced manufacturing, and defence and space.

Etienne Höra: EU–China trade – Gearing up for later action

The EU-China trade debate picks up from where it left off for the summer. The diagnosis is clear, less so what to do about it. Von der Leyen highlights “unsustainable” imbalances (a deficit of €1bn a day), as well as the EU‘s readiness to use its existing trade instruments to address this.

For now, there is no big bang, but more gearing up for the real decisive phase. The EU has set a negotiation deadline for October, with the prospect of more trade restrictions in the absence of concrete results and concessions from China.

Ahead of that deadline, two challenges loom large. The EU remains highly dependent on many critical goods from China, notably rare earths used for permanent magnets. This enables China to kneecap European manufacturing in retaliation for EU trade restrictions.

Further, political momentum for a more assertive stance will need to be built in the Member States. The broad coalition around the China shock diagnosis at the European Council in June could fracture when it comes to concrete measures and their costs, especially as the German government, a key player in the debate, faces domestic challenges. The EU should use the remaining time to double down on de-risking and prepare for difficult internal negotiations ahead.

Cora Jungbluth: EU-China relations have reached a tipping point

EU-China relations have entered a critical phase. Trade policy is a top priority and the trade deficit with China is ballooning. Ursula von der Leyen rightly called it a “tipping point”.

A trade and investment consultation mechanism was set up in June to negotiate concrete steps with China to reduce trade imbalances. In this context, the EU also set an October deadline for the dialogue with China to deliver results or lead to tangible consequences. Von der Leyen reiterated that “we will use all the tools at our disposal to rebalance our relationship. Words are good. But deeds are better.” Deeds better follow for the EU’s credibility. If measures following these stark announcements are meek or negligible, it will be hard for the EU to be taken seriously on the international level in trade policy.

But relations with China have gone beyond trade policy, although this did not feature explicitly in the speech. Von der Leyen mentioned the ongoing second China shock and its contribution to deindustrialisation. But the China shock is more than that. It is a challenge to Europe’s security and social resilience. The first China shock in the US bolstered Donald Trump and the MAGA movement. An eroding industrial base may cause more of Europe to tilt towards populist and extreme parties. Moreover, it is clear that Russia could not wage war on Ukraine without China’s at least indirect support.

The Council of the EU identified “China as a critical long-term strategic challenge” in July’s EU strategic environment assessment. This aspect was conspicuously absent from von der Leyen’s speech.

But thinking about China in a more integrated way – beyond trade imbalances – will help readjust EU-China relations and the EU’s role in the shifting international order. Against this backdrop, it is noteworthy that von der Leyen mentioned Russia 12 times, while China – one of the two superpowers of this evolving order – is mentioned five times and the United States is not mentioned explicitly at all.

Brandon Bohrn: The elephant in the room – Europe’s response to a less reliable Washington

Sometimes what is left unsaid says the most. In her 2025 address, Ursula von der Leyen sought to balance greater European independence with close US ties in trade, security and defence, describing the trading relationship as Europe’s “most important”. What a difference a year can make.

The US received just one mention in her 2026 speech, but it was ever-present. Her reference to standing up for Greenland was the clearest indirect rebuke to Washington, while closer security and defence ties with Canada, the UK, Ukraine and Norway signalled Europe’s efforts to diversify its partnerships beyond the US. And with Mark Carney present, her proposal to open the door to Canadian associate membership of the EU carried particular weight. “One ocean, one set of values, one way of seeing the world” framed Canada as a transatlantic partner Europe could still rely on.

The call for a European equivalent of NATO’s Article 4 does not emerge in a vacuum. Read alongside her warning that “old assumptions and relationships have frayed”, the proposal reflects growing doubts about US reliability and the need to strengthen Europe’s capacity to respond independently.

Yet that sole US mention – purchasing American Patriot missiles – exposes the dilemma at hand. Europe seeks greater independence from Washington but still relies on American defence supplies. Developing missile defence with Ukraine offers a concrete way forward. Now, the task is to build those capabilities while keeping Washington engaged where cooperation remains essential.

Volodymyr Gushuley: Europe as a guiding star in hard winters

Today’s sobering truth is that Ukraine faces yet another wartime winter. The proposed solution is a targeted winter support package amounting to almost €1 billion, urgent procurement and delivery of air defence missiles capable of intercepting ballistic rockets, and diversification of dependency through the Freyja project of joint missile defence production. The latter, however, may become part of the solution only after the coming winter.

President von der Leyen urged the EU to intensify sanctions pressure on Russia, but this will soon be put to the test as EU Member States struggle to roll over sanctions against some Russian oligarchs. So far, the ongoing war on European soil has cost the EU more than €220 billion in support delivered for Ukraine. These resources almost mirror the frozen Russian assets in the EU. Despite ongoing battles around the next EU MFF and increasing calls among the Member States to prioritise domestic needs, the fate of these frozen assets was absent in the speech.

Christian Hanelt: Europe’s Southern Neighbourhood

Two priorities stood out regarding Europe’s Southern Neighbourhood. First, Ursula von der Leyen underlined a clear commitment to keeping “the flame of a two-state solution alive” while supporting Israel’s right to self-defence and the Palestinian people’s right to dignity and safety. What stood out was her acknowledgement that Member States are unable to respond in a unified way, including on measures against violent Israeli settlers. This division limits Europe’s ability to shape further developments in the region.

Second, a Mediterranean Youth Skills and Jobs Initiative was announced with the main goal of better education and employment opportunities for young people in the countries of the Southern Neighbourhood. This is an important step towards reducing the prosperity gap between the two shores of the Mediterranean. Notably, von der Leyen refers to the initiative in the context of irregular migration and the protection of European borders.

But linking the youth initiative too closely to the issue of irregular migration should not be an overarching narrative. Instead, it should be framed as a response to the Southern Neighbourhood’s broader social and economic challenges, as well as Europe’s need to diversify supply chains and energy imports.

Miriam Kosmehl: No mention of EU reforms

It is striking that President von der Leyen made no mention of the EU’s internal reform agenda. The omission seems all the more notable in light of the expectation that the Commission will finally set out its position, so far repeatedly postponed, alongside the upcoming European Council in October. Its draft agenda explicitly features “a strategic discussion on EU enlargement and internal reforms”. Furthermore, pre-enlargement reviews and policy reform proposals are awaited with some anticipation.

Von der Leyen chose to focus on external sovereignty generally and newer legislative priorities, such as AI safety and the EU Kids Act. Leaving governance reform and institutional restructuring, for some Member States a prerequisite to enlargement, off the immediate SOTEU stage, the Commission seems to be waiting to present its core proposals in tandem with the Member States’ leaders at the European Council. This avoids triggering early institutional friction with the European Parliament and (some) national capitals.