Today, Ursula von der Leyen delivered her annual State of the European Union speech in Strasbourg, where she, for the first time, proposed sanctions on Israeli officials, acknowledged the backlash over the EU-US trade deal, and underlined the importance of competitiveness for Europe.
But can these promises restore trust in her leadership, or will they deepen the divisions inside the EU?
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Today, Ursula von der Leyen delivered her annual State of the European Union speech in Strasbourg, where she, for the first time, proposed sanctions on Israeli officials, acknowledged the backlash over the EU-US trade deal, and underlined the importance of competitiveness for Europe.
But can these promises restore trust in her leadership, or will they deepen the divisions inside the EU?
Ursula von der Leyen opened her speech with security. Just hours before her speech, more than ten Russian drones violated Polish airspace. Von der Leyen said the European Union stands in full solidarity with Poland. She confirmed that the commission is preparing the bloc’s nineteenth sanctions package against Russia. This package will target the so-called “shadow fleet” transporting Russian oil, third countries helping Moscow bypass sanctions, and it will push Europe to accelerate its complete phase-out of Russian fossil fuels.
On Ukraine, von der Leyen announced a new financial tool. It’s called a “reparation loan,” and it would be backed by the profits from frozen Russian assets. Not the assets themselves, but the interest they generate. Ukraine would only repay the loan once Russia pays reparations. And von der Leyen underlined that European taxpayers should not bear the cost of rebuilding Ukraine.
Then came Gaza. Von der Leyen described the humanitarian situation there as catastrophic. For the first time and in very harsh language she proposed sanctions on extremist Israeli ministers and violent settlers. She also called for a partial suspension of the EU- Israel Association Agreement, which regulates trade. And she announced that the commission itself will suspend certain payments to Israel, while continuing to fund Israeli civil society groups. Finally, she said the EU will push for the creation of an international donor group to finance Gaza’s reconstruction.
Von der Leyen then shifted to the economy and competitiveness. She warned that Europe faces strong economic headwinds and growing dependencies. She announced a Single Market Roadmap to 2028, a new “Scale-Up Europe Fund” to attract private investment into critical technologies, and a “Made in Europe” clause in public procurement. She also highlighted a one-point-eight-billion-euro “Battery Booster” package, aimed at scaling up European battery production.
On energy, she repeated the EU’s goal of phasing out Russian fossil fuels completely by 2027. She said Europe must expand its renewables, keep nuclear in the energy mix, and build what she called “Energy Highways” to remove eight major cross-border bottlenecks in Europe’s infrastructure.
Housing was another major theme. Von der Leyen pointed out that house prices have risen more than twenty percent since 2015, while building permits have dropped by more than twenty percent in the last five years. She announced that the European Affordable Housing Plan, originally scheduled for 2026, will now be presented this year. It will revise state-aid rules, support the construction of homes and student residences, and introduce a proposal on regulating short-term rentals.
Agriculture also featured in the speech. She promised to simplify the Common Agricultural Policy, protect farmers’ incomes in the next EU budget, and fund a new “Buy European” campaign to promote local products.
And finally, von der Leyen repeated that access to EU funds will remain tied to respecting the rule of law and fundamental rights.
Now, this speech showed the EU’s priorities in a moment of political tension. On Russia and Ukraine, the message was about strength and financial responsibility. On Gaza, there was a shift: for the first time, the commission proposed sanctions on Israeli officials. And on housing, energy, and farming, von der Leyen was responding directly to issues that affect Europeans’ daily lives, from energy bills to rent prices.
What’s next?
The parliament and the council will now have to debate these proposals. Agreement on another Russia sanctions package is likely. But the measures on Israel are expected to divide member states sharply. The housing plan and competitiveness agenda will face pressure from both industry and governments worried about costs. And politically, von der Leyen still has to survive the upcoming motions of censure in parliament.
Evi Kiorri is a Brussels-based journalist, multimedia producer, and podcaster with deep experience in European affairs.
Evi Kiorri is a Brussels-based journalist, multimedia producer, and podcaster with deep experience in European affairs.