ARTICLE21 September 2022

Von der Leyen’s state of the Union speech overlooked the importance of free trade

Anna Stellinger, Deputy Director General International and EU Affairs at the Confederation of Swedish Enterprise, notes a worrying trend towards increased state intervention and state aid instead of free trade in Ursula von der Leyen’s state of the Union speech.

Anna Stellinger, Ursula von der Leyen and Marie Knutsen-Öy. Photo: Ulf Börjesson/Ernst Henry Photography/Jean-Francois Badias

Several of the energy policy solutions the European Commission President referred to risk worsening the outlook for businesses if they become mandatory, believes Marie Knutsen-Öy, Director Energy Policies at Swedish Enterprise.

Von der Leyen delivered her annual speech on the state of the European Union on Wednesday 14 September. As expected, she put considerable focus on how the EU is taking steps to address the energy crisis, strategic dependencies and climate change. She also spoke about the importance of protecting democracy, the principles of the rule of law and defending European values and institutions from foreign influence.

From a Swedish perspective, significantly more favourable energy policy solutions exist than those proposed by von der Leyen.

– The proposed regulation of electricity producers’ profits at EU level risks worsening the position of Swedish companies if it becomes mandatory. Many producers fixed the price of a substantial proportion of their supplies before the crisis at prices that are not reflected in today’s electricity market. The substantial congestion revenues generated, which of course actually belong to electricity users, could be used for this purpose, says Knutsen-Öy.

The fact that the proposed tax explicitly targets fossil-free energy is directly counterproductive, she adds.

– This will not help reduce our dependence on fossil fuels or reduce emissions, Knutsen-Öy says.

Worrying trend

Stellinger notes a worrying trend towards increased state intervention and state aid instead of free trade in the speech. 

– Competitiveness, which is key to Europe’s long-term growth, was absent and only mentioned in passing. This is extraordinary. There is a trend towards increased state intervention and state aid that risks causing long-term damage. We would have liked to have seen greater focus on the importance of free trade, and the referring to the US from a trade perspective, but this was entirely absent, Stellinger says.

– On the other hand, it was positive that von der Leyen addressed the importance of the internal market. It was also good that the crucial role of companies in the green and digital transition was mentioned several times in the speech, unlike last year when they were conspicuous by their absence, she adds.

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Publisher and editor-in-chief Anna Dalqvist