EU Insight 31 January 2025

Brussels, 31 January 2025

RESTORING EU GROWTH: VON DER LEYEN PRESENTS THE COMPETITIVENESS COMPASS
Amid a bleak economic outlook and lagging productivity growth, boosting competitiveness through innovation and simplification has emerged as one of the cornerstones of the new legislative mandate. Building on this, the European Commission presented the Competitiveness Compass. In the words of President von der Leyen acting as the “North Star” of the new Commission, the Compass focuses on increasing innovation, decarbonising and enhancing security, facilitated by five horizontal enablers such as simplification, lowering of market barriers and increased investments. Beyond a general indication of the direction of travel, the Compass provides additional details on the Commission’s announced flagship initiatives.

LAUNCH OF THE STRATEGIC DIALOGUE ON THE FUTURE OF THE AUTOMOTIVE INDUSTRY
The European automotive sector is at a crossroads with the EU’s 2035 phase-out of combustion engines and China’s rise as an EV manufacturing hub. To support the industry’s transformation, the European Commission launched the Strategic Dialogue on the Future of the Automotive Industry. As part of the dialogue, regular meetings with industry, social partners, and civil society are foreseen to identify measures addressing urgent sector needs. A first step in that direction will be the Industrial Action Plan for the Automotive Sector, set to be unveiled on 5 March.

EUROPEAN DEFENCE FUND INVESTS €1 BILLION IN 2025 TO DEVELOP CRITICAL TECHNOLOGIES
In light of the rising geopolitical threats threatening the EU’s security, the European Defence Fund was established to foster the collaborative development of critical defence technologies. By allocating more than €1 billion for 2025 within an investment framework of €7.3 billion until 2027, the Fund attempts to bring together Member States in the creation of technologies covering air, space, and ground combat, as well as naval, cyber and hybrid threats. As such, the Fund’s investments are aligned with the goals of the Strategic Technologies for Europe Platform (STEP), similarly aiming to boost investment in critical technologies for Europe.

COMMISSION REMOVES FUNDING ELIGIBILITY FOR ENVIRONMENTAL LOBBYING
Against the backdrop of the green transition that shaped the previous legislative mandate, the European Commission promoted and provided funding to a plethora of sustainability initiatives, among them the Programme for the Environment and Climate Action (LIFE). The European Commission has now communicated to recipients under the programme that LIFE funds cannot be used anymore to finance advocacy and lobbying initiatives. Welcomed by MEPs from the right political spectrum, NGOs argue that the funding stop would tip the balance in dis-favour of civil society interest groups and hamper the development of sustainable solutions.

EU COMMEMORATES HOLOCAUST REMEMBRANCE DAY ON 80TH ANNIVERSARY
80 years after the liberation of Auschwitz-Birkenau concentration camp, the European Parliament and Council remembered and honoured the six million Jews and millions of others murdered by the Nazi Regime. In a special plenary sitting of the Parliament, Corrie Hermann recounted the fate of her late father Pál, killed by the Nazis in 1944. President Metsola urged remembrance of the Holocaust’s horrors and reiterated the Parliament’s commitment to dignity, hope and humanity. In a statement marking the International Holocaust Remembrance Day, the European Council also paid tribute to the victims and vowed to fight antisemitism with EU leaders condemning the surge in antisemitic incidents and reaffirming their stance against all forms of hatred and discrimination.

COMING UP NEXT WEEK
• 3 February: Informal EU leaders’ retreat, European Council. On the agenda: EU defence capabilities, corresponding investments and international partnerships.
• 3-4 February: Informal meetings of the Trade and Competitiveness Ministers. On the agenda: alignment of industrial and trade policies.
• 5 February: College of Commissioners. On the agenda: challenges around e-commerce platforms.

Tuomas Tierala, Managing Partner Brussels, Kreab
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Kreab • Tel: +32 2 737 6900 • tuomas.tierala@kreab.com • www.kreab.com/brussels • X: @KreabEU • LinkedIn: Kreab Worldwide

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