“Our Union has never been stronger.” That was how Ursula von der Leyen opened her 2026 State of the Union address. A few sentences later, she said Europe had never been so vulnerable.
Much of Europe’s economic predicament today lies somewhere between those two statements. Viewed through the eyes of business, the speech touches on many of the issues that have come to dominate Europe’s economic debate over the past two years: industry, energy, the Single Market, simplification and innovation. They are, broadly, the same weaknesses identified by the Draghi and Letta reports.
Curiously, competitiveness features more prominently in the substance of the speech than in its language. Yet there are moments when measures set in motion are presented almost as though they were results already delivered. For businesses, that distinction is anything but academic.
Take industry. On the “second China shock”, von der Leyen no longer speaks of a looming threat. “It is already here,” she said, pointing to the deindustrialisation already affecting parts of Europe’s industrial base. The warning could hardly be clearer. Europe does not simply need to reduce its dependencies. It needs to make sure it retains the capacity to produce.
Europe’s response centres on strategic technologies, clean tech, artificial intelligence, critical raw materials and key value chains. All of that matters. But when a company decides where to invest and produce, it also looks at energy prices, the cost of capital, how long it takes to secure a permit, whether skilled workers are available and whether the rules are likely to remain stable.
Industrial policy may begin with grand strategies. Businesses judge it by those conditions.
There is also a question of scale - though not in the sense most often discussed in Brussels. Micro and small enterprises make up 99% of Europe’s business economy. Most of them will never develop semiconductors, frontier AI models or clean technologies. But they do need to be able to use them.
Here, von der Leyen made an important point. Speaking about AI, she argued that Europe does not necessarily have to develop every frontier technology itself in order to benefit from it. The real task is to take it “from the screen to the real economy”.
It was one of the most interesting lines in the speech. And the principle should extend well beyond AI.
The next EU budget will devote substantial resources to strategic technologies, digitalisation, clean tech, biotechnology, defence and space. Europe does need to close its technology gap. But success cannot be measured only by the number of new technologies developed or scale-ups created. It must also show up in the productivity of the businesses expected to adopt them.
For a small company, innovation is often rather less spectacular: automating a process, introducing AI into day-to-day operations, buying a new machine, training an employee, cutting energy consumption or finding a customer in another Member State.
Multiply those changes across millions of businesses and they become part of the productivity leap Europe so badly needs.
Then there is simplification. This is perhaps where the gap between narrative and reality is most visible.
The Omnibus packages have marked a change of direction. But announcing simplification is not the same as delivering it. Some measures have been adopted; others are still being negotiated. Years can pass between a proposal being tabled in Brussels and an obligation actually disappearing from a company’s desk.
And while Europe is trying to simplify the rules of today, businesses are still absorbing the rules of yesterday.
The Packaging Regulation has applied since August, and its implementation has already required interpretative guidance from the Commission. From 27 September, new provisions under the Empowering Consumers for the Green Transition initiative will apply. Even before they entered into force, European-level agreement was needed on a very practical question: what should happen to stocks of products already on the market?
These are not minor technicalities. They are the point at which a European rule becomes a cost, a procedure or a source of uncertainty for a business.
The Commission itself has set a 2029 target of cutting administrative burdens by 25% for all businesses and by 35% for SMEs. That alone suggests it is far too early to treat simplification as a result already secured.
Von der Leyen also called on Member States to avoid gold-plating. Fair enough. But not all European bureaucracy originates in national capitals. It can start in EU legislation, grow during transposition and become more complicated still in implementation.
By the time it reaches a business, what matters is the total burden. Who added which layer is of rather less importance.
The German Chambers of Commerce and Industry have chosen distinctly less institutional language to describe the accumulation of rules and complexity: “Ich kann so nicht arbeiten” - “I cannot work like this”.
It is a slogan, but it raises a question worth asking in Brussels too: how much of an entrepreneur’s time is actually left for running the business?
The same tension runs through the Single Market. For more than thirty years, we have described it as Europe’s greatest competitive asset. Yet regulatory and administrative differences still make it harder to do business across borders, especially for smaller companies.
A market of 450 million consumers is an extraordinary competitive advantage - but only if businesses can actually use it as a single market.
This is why the perspective of Chambers matters. Not because Europe needs another intermediary between Brussels and business, but because someone needs to look at what is left of a European policy by the time it reaches a company’s front door: whether it is understandable, what it costs to comply with, what opportunities it creates and what obstacles remain.
The State of the Union presents a stronger, more independent Europe - one that has begun to respond to many of the weaknesses exposed in recent years. From the business perspective, however, the distance between policies announced and results felt on the ground remains considerable.
And that may be the real risk: mistaking action taken for results achieved.
Claiming success before businesses can recognise it in their day-to-day experience risks widening, rather than narrowing, the gap between Brussels and the real economy.
European competitiveness is built in laboratories, through frontier technologies and in major strategic investments.
But in the end, it can also be tested against a much simpler question:
Is it actually easier today for a business in Europe to invest, hire, innovate, export and grow?
Ana Sarateanu
Director of Unioncamere Europa