A New Chapter for the EU: What the second Von der Leyen Commission Means for UK Businesses

Group photo of the von der Leyen Commission, 11/12/2024

As we move into the final month of 2024 the European Union has officially welcomed the second term of the Von der Leyen Commission, marking a new chapter in its leadership and policy direction.

Whilst Ursula von der Leyen’s re-election as President of the European Commission might signal continuity in the EU’s overarching priorities to some, it comes with a reshuffled team, a renewed mandate for 2024-2029, and perhaps most importantly, a reflection of some of the big challenges facing the EU over the coming years.

In a major shift to begin with Thierry Breton, who had been serving as the Commissioner for Internal Market, resigned from the Commission when it became clear Von der Leyen did not want to see him re-nominated by France. His position had come under the spotlight a number of times particularly because of the battles he picked with big US tech giants through the legislative acts he led, including the EU's Digital Services Act and AI Act, and Von der Leyen clearly thought a break with the past may help in negotiations with the incoming Trump administration.

As a result of his effective dismissal, albeit it presented as a resignation, Commissioner Breton's portfolio has been divided amongst those now in position. This includes a Vice President for Prosperity and Industrial Strategy, and Commissioners for Trade and Economic Security, Economy and Productivity, International Partnerships, and Startups, Research and Innovation.

These new titles show the importance the EU is placing on a comprehensive industrial strategy, unburdoning SMEs from the web of administration currently required, fostering a culture of entreprenourialism, and boosting R&D and wider innovation across the bloc. Whilst these are laudible aims, the proof will of course be in the pudding and the EU has too often had a history of launching regulations that show it is fearful of change rather than ready to embrace it. It may also be a positive sign that the EU is looking at the administration burden faced by SMEs, and many UK businesses will be waiting to see if easing this extends to those looking to do business with the EU from outside it, as well as those inside.

The EU's shift in foreign policy is also not to be underestimated, with it moving to a model focused on economic security and prosperity. In this the Commission has made specific mention of reforms needed to the international system and the need to respond to the concerns of allied nations on the impact of EU legislation. This is a clear nod to President Trump and Elon Musk who have been deeply critical of the EU on areas ranging from manufacturing through to tech regulation.

It is under this Commission term that the UK-EU Trade and Cooperation Agreement, which governs the relationship post-Brexit, is due to be reviewed. A number of contentious issues are likely to come to the fore during any discussions on this, including fishing rights which expire in 2026, a Youth Mobility Scheme which the EU is keen to secure, and a new regime for SPS (sanitary and phytosanitary) checks at the border which Labour committed to in its 2024 General Election manifesto.

Positively, these discussions are likely to be led by Maroš Šefčovič on the EU side, who has had responsibility for the TCA since its inception. His approach has generally been one of pragmatism and this looks set to continue with a number of meetings already having been held between him and the new Labour administration in the UK.

The UK has a unique opportunity to leverage its post-Brexit freedoms while maintaining a pragmatic partnership with the EU. With geopolitical tensions rising the Von der Leyen Commission looks to be recognising that strength amongst allied Western nations is essential, and with President Trump threatening tariffs on EU goods when he enters the White House, the UK is perfectly placed to bridge the Atlantic gap. If the EU shows that its desire to improve innovation and SME barriers extends to those nations with which it has trade agreements, like the UK, then businesses here have every chance of growing their opportunities on the continent as well as capitalising on Trump's love of Britain.