EU faces a time of challenges

When European Commission President Ursula von der Leyen unveiled the next college of commissioners for her second five-year term on Sept 17, she said "the whole college is committed to competitiveness" and "all commissioners must work together".

It came just a day after the abrupt resignation of the powerful French Commissioner for Internal Market Thierry Breton, who openly accused von der Leyen of "questionable governance" and trying to exclude him from the next commission.

Unlike the departure of former executive vice-president Frans Timmermans, who quit a year ago to run for Dutch prime minister, Breton's public display of discontent has been seen by some as embarrassing for von der Leyen, but also described by others as a victory for von der Leyen in her grip on power.

"From queen to empress," read a recent headline of a story on Politico.eu, a digital news site. Several European news outlets have nicknamed the commission president "Queen Ursula" for the past years.

Von der Leyen was also humiliated when most of the 27 EU member states defied her instruction a few months ago to submit two candidates — one man and one woman — for her to create a fully gender-balanced team of commissioners. After successfully pressing some smaller member states to swap women for men candidates, she claimed that "we were able to improve the balance to 40 percent women and 60 percent men" in contrast to the original 22 percent women candidates.

The 26 commissioners she announced at a news conference in Strasbourg during the European Parliament plenary session are yet to go through a screening and hearing in the parliament, a process that could go well into November or December. In von der Leyen's first term starting in 2019, three nominees for commissioners failed to win approval from the parliament.

Jasna Plevnik, president of the Geoeconomic Forum Croatia, a think tank, said that EU member states must find a way to halt the growing power of the European Commission leadership over the past five years.

"The role of the executive power has increased, and that shift has challenged the balance of governance within the European Union, the EU's global position, and even worse (it has) put America's strategic and economic interests above the EU's," she said, referring to the public criticism that von der Leyen is "vehemently pro-American".

Just a week before von der Leyen's announcement of the new college, Mario Draghi, the former European Central Bank governor, released a roughly 400-page report on the European Union's future competitiveness. It paints a dismal picture of the bloc in terms of technology, innovation and manufacturing.

The report, ordered by von der Leyen, laments that the EU economy has fallen behind the United States while China is inexorably catching up.

Draghi said the EU faces "an existential challenge" and if it does not change, it will be condemned to "a slow agony".

"The EU is weak in the emerging technologies that will drive future growth. Only four of the world's top 50 tech companies are Europeans," he said.

Since 2008, 30 percent of European "unicorns", or startup companies valued at over $1 billion, have left the bloc for the US, Draghi told reporters at the news conference for the report.

The report calls for closing the innovation gap with the US and China, especially in advanced technologies. It urges improving the bloc's competitiveness through closer cooperation in core areas and massive investment — up to 800 billion euros ($894 billion) annually, in shared objectives.

The report also calls for developing a joint plan to link the goal of decarbonization with increased competitiveness. It warns that the EU must significantly ramp up joint defense spending to reduce its reliance on the US for security.

"The diagnosis is scathing and the medicine is strong," said Sebastien Maillard, associate fellow of the Europe program at Chatham House, a leading think tank based in the United Kingdom, adding that Draghi's strategy does not just come down to money.

"It advocates a new stance toward cooperation by coordinating policies, cutting red tape and better respecting the principle of subsidiarity so that the EU remains focused on areas where it most adds value," he wrote on the Chatham House website.

The report advocates reforming competition law to facilitate mergers of European corporations, referring to the European Commission's ban in 2019 on Siemens' proposed acquisition of Alstom in the high-speed train sector.

While von der Leyen applauded the report as providing guidance for her second term, Friedrich Merz, the leader of the Christian Democratic Union, the largest party in the German parliament, and a strong contender to be the next German chancellor, immediately voiced his opposition to the permanent issuing of EU joint debt featured in the Draghi report.