The European Commission’s First 100 Days: Focus on Defence and Industry

As is customary when new governments take office, the European Commission’s work is assessed after its first 100 days. This period has been largely shaped by geopolitical developments, bringing defence policy and industrial strategy to the forefront of the EU’s agenda. 

“On March 6, during an extraordinary European Council summit, EU leaders adopted the ReArm Europe initiative.”

Defence: Decisive Steps Towards Strategic Autonomy 

On March 6, during an extraordinary European Council summit, EU leaders adopted the ReArm Europe initiative. It’s a major plan to enhance Europe’s defence capabilities and move towards a more sovereign European defence policy.

The initiative aims to mobilize up to €800 billion over the next four years through four key measures:

• Fiscal flexibility for increased defence spending – EU leaders agreed to activate the Stability and Growth Pact’s national escape clause, allowing member states to increase defence budgets without triggering an excessive deficit procedure. If countries increase their defence spending by 1.5% of GDP on average, it could create an additional €650 billion in fiscal space over four years.

• 150 billion EUR defence loan programme – EU leaders also approved a 150 billion EUR loan scheme, where the Commission will raise funds and distribute them as loans to member states to finance purchases of artillery, missiles, ammunition, drones, and anti-drone systems. This funding will also enable member states to increase direct military aid to Ukraine.

• Redirecting EU budget towards defence – The Commission announced new incentives for member states to use cohesion policy funds for defence, allowing governments to reallocate existing EU resources to security investments.

• Involvement of private capital – The European Investment Bank (EIB) will expand its mandate to support private sector investments in the defence industry, facilitating additional funding through European banks.

In addition, the long-awaited White Paper on the Future of European Defence is set to be published in the coming weeks. Presented by EU foreign policy chief Kaja Kallas and Defence Commissioner Andrius Kubilius, the White Paper will assess Europe’s military readiness for potential conflicts and propose mechanisms for joint procurement and NATO deterrence strategies. Kubilius has also stressed the need for joint ammunition stockpiling to strengthen Europe’s defence industry and reduce dependency on third countries.

In a further step towards strengthening Europe’s security, European Commission President Ursula von der Leyen announced the creation of a “Security College”. The initiative will ensure that European commissioners receive frequent security briefings, including intelligence reports on emerging threats such as cyberattacks, hybrid warfare, and geopolitical risks.

Industrial Policy: The Clean Industrial Deal and Reducing Bureaucracy 

Alongside its ambitious defence agenda, the European Commission has introduced the Clean Industrial Deal, a 100 billion EUR strategy designed to help traditional industries reduce their carbon footprint while fostering a competitive clean-tech sector. The deal includes a 50 billion EUR Industrial Decarbonization Bank to support innovation and the transition to climate-neutral production. It also features a joint procurement of critical raw materials, such as lithium and cobalt, to reduce Europe’s dependency on external suppliers and secure industrial competitiveness. Industry representatives have praised the initiative as a historic shift in EU policy, balancing economic growth and climate goals. However, environmental organizations have criticized it, arguing that it weakens EU climate objectives and makes concessions to energy-intensive industries and polluters.

The Commission’s Omnibus Simplification Package, another key element of its industrial policy, has further divided opinions. Designed to cut administrative burdens and reduce green reporting obligations for businesses, it exempts 80% of companies from sustainability reporting. While businesses welcomed the move as essential relief, sustainability advocates condemned it as a step that weakens corporate accountability.

“The first 100 days of the European Commission have undoubtedly set the stage for long-term political struggles.”

The first 100 days of the European Commission have undoubtedly set the stage for long-term political struggles. With an €800 billion defence investment, relaxed fiscal rules and plans for joint procurement, the EU is making a move towards strategic autonomy, but more flexible fiscal policies could raise questions about the sustainability of European economic policy.

The crucial months ahead will see whether the EU can take decisive action after the turmoil and balance security concerns, the competitiveness of its own economy and continued support for Ukraine.