European Commission President Ursula ​von der Leyen presser • FRANCE 24 English

European Independence and Strategic Realignment: A Summary of Ursula von der Leyen’s Davos Address

Key Concepts:

• European Independence: The central theme, advocating for reduced dependencies and increased self-reliance in economic, political, and security spheres.
• De-risking: Diversifying supply chains and reducing reliance on single sources, particularly in critical raw materials and energy.
• EU Inc.: A proposed unified European company structure designed to simplify cross-border business operations.
• Savings and Investment Union: A framework to deepen and liquidify European capital markets, attracting investment and funding for innovation.
• Energy Union: A plan to create an interconnected and affordable energy market, enhancing energy security and independence.
• Arctic Security: The importance of securing the Arctic region, particularly in light of geopolitical tensions and the need for collaboration with allies.
• Strategic Autonomy: The ability of Europe to act independently and pursue its interests on the global stage.

I. Historical Context and the Imperative for Change

Ursula von der Leyen began by referencing the founding spirit of the Davos forum – a platform for dialogue on pressing global issues. She drew a parallel between the current fractured world and the period following the 1971 “Nixon shock,” when the US dollar was delinked from gold, collapsing the Bretton Woods system. This event, she argued, inadvertently fostered globalization but also served as a crucial lesson for Europe regarding the dangers of dependency, specifically on foreign currencies. She posited that current geopolitical shocks should similarly be viewed as opportunities to build a “new form of European independence,” an imperative that has been structural for some time. Despite initial skepticism, a consensus around this concept is now emerging due to the “sheer speed and almost unthinkable scale of change.”

II. Expanding Trade Partnerships and Economic Diversification

Von der Leyen highlighted recent progress in diversifying Europe’s trade relationships, emphasizing a shift towards “fair trade over tariffs, partnership over isolation, sustainability over exploitation.” The EU-Mercosur trade agreement, signed in Paraguay, was presented as a landmark achievement, creating the world’s largest free trade zone encompassing 31 countries, over 700 million consumers, and over 20% of global GDP, all aligned with the Paris Agreement.

Further agreements with Mexico, Indonesia, Switzerland, and ongoing negotiations with Australia, the Philippines, Thailand, Malaysia, the United Arab Emirates, and India were detailed. The potential trade agreement with India was described as a “mother of all deals,” potentially creating a market of two billion people and a quarter of global GDP, offering Europe a “first mover advantage” in a rapidly growing region. She emphasized Europe’s desire to engage with growth centers across Latin America, the Indo-Pacific, and beyond, stating, “Europe wants to do business with the growth centers of today and the economic powerhouses of this century.”

III. Building a More Competitive European Economy: EU Inc., Capital Markets, and Energy Security

Von der Leyen outlined three key focal points for strengthening the European economy. First, the creation of a more conducive regulatory environment for businesses, encapsulated in the concept of “EU Inc.” This initiative aims to establish a single, simplified set of rules for companies operating across the EU, allowing for company registration within 48 hours and seamless operation across member states, mirroring the ease of doing business in the US or China.

Second, she emphasized the need for a “Savings and Investment Union” to create a deep and liquid capital market, attracting investment and providing businesses with access to funding, including equity, at lower costs. Proposals for market integration and supervision are underway to ensure efficient capital flow towards scale-ups, innovation, and industry.

Third, the development of an interconnected and affordable energy market – a “true energy union” – was presented as crucial. The “Affordable Energy Action Plan” focuses on investing in energy security and independence through interconnectors, grids, and the promotion of homegrown energy sources (nuclear and renewables) to reduce prices, cut dependencies, and mitigate volatility.

IV. Strengthening European Security and Defense

Von der Leyen underscored the increasing link between economic and national security, citing a surge in defense spending to €800 billion by 2030. This investment has tripled the market value of European defense industry companies since January 2022 and fostered the emergence of unicorn startups focused on AI-powered defense technologies. She stated, “This now only shows how economy and national security are more linked than ever, but also what we can do when Europeans have the will to match the ambition.”

The ongoing war in Ukraine was addressed, with a firm commitment to supporting Ukraine with a €90 billion loan for 2026-2027 to bolster its defense capabilities and maintain essential services. She also announced the permanent immobilization of Russian assets, reserving the right to utilize them, as a “stark reminder to Russia.” Von der Leyen affirmed Europe’s unwavering commitment to Ukraine’s security, defense, and European future.

V. Arctic Security and Transatlantic Relations

The issue of Arctic security emerged as a critical concern, particularly in relation to the United States. Von der Leyen highlighted the commitment of EU member Finland to selling icebreakers to the US, demonstrating European capabilities in the region. However, she criticized proposed US tariffs as a “mistake,” especially between allies, emphasizing that “a deal is a deal.” She stressed the importance of maintaining strong transatlantic relations, stating that the US is considered not just an ally but a friend.

She outlined a four-pronged approach to Arctic security: full solidarity with Greenland and Denmark, a massive European investment surge in Greenland, collaboration with the US and other partners, and strengthening security partnerships with the UK, Canada, Norway, Iceland, and others. Europe is preparing a new security strategy, including an upgraded Arctic strategy, based on the principle of self-determination for sovereign peoples.

VI. Conclusion: A Call for Urgency and Adaptation

Von der Leyen concluded by reiterating the need for Europe to accelerate its push for independence across all spheres – security, economy, defense, and democracy. She emphasized the importance of dialogue with both friends and adversaries, recognizing that the world has changed permanently and Europe must adapt accordingly. She ended with a resounding call for unity and ambition, proclaiming, “long live Europe.”

Notable Quote:

“Nostalgia will not bring back the old order, and playing for time and hoping for things to revert soon will not fix the structural dependencies we have.” – Ursula von der Leyen.

Technical Terms:

• Breton Woods System: The post-World War II international monetary system established in 1944, based on fixed exchange rates.
• De-risking: Reducing economic dependencies on potentially unreliable partners.
• Gigafactories: Large-scale manufacturing facilities for batteries and other high-tech components.
• Unicorn: A privately held startup company valued at over $1 billion.
• Interconnectors: High-voltage transmission lines connecting different countries’ electricity grids.
• Strategic Autonomy: The capacity of a political entity to act independently and pursue its own interests.