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Economic Update

2019/12/05

Challenges Ahead for New EU Chief

Ursula von der Leyen, Germany’s former defence minister, officially took office as President of the E.U. Commission on 1 December, succeeding Jean-Claude Juncker.

Given her promise to reshape the European Union into a “geopolitical” force in the global order, combating climate change will be among Leyen’s top priorities during her five-year tenure. She will propose a “European Green Deal” in her first 100 days in office. Details of the deal, which aims to tighten the bloc’s carbon emission target for 2030 and make the E.U. carbon-neutral by 2050, are expected to be unveiled next week, and many sectors including transportation, energy, agriculture and manufacturing will be affected.

Apart from the Green Deal, Leyen’s plans regarding technology and digitalization are also attracting attention. She has promised to put forward legislation to address the “human and ethical implications” of artificial intelligence during her first 100 days in office. Such legislation may bring significant impacts to businesses, similar to the introduction of the General Data Protection Regulation, creating the same challenge of striking a balance between protecting individuals and avoiding overregulation that can hinder innovation. Leyen has pledged to take action in other areas, such as minimum wage and gender equality.

It is true that she takes office at a time when the E.U. economy is in better shape than Juncker’s arrival in 2014, with the unemployment rate now at its lowest level since the data series started in 2000. Nevertheless, her tenure is unlikely to be easy, amid issues such as trade tensions with the United States, a strained Franco-German relationship, Brexit-related uncertainty, and, as ever, the challenge of different interests and priorities among the various governments of the E.U. member states.

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