European Union Economic Update: After Trump Win, EU Ambitions Face Fractured Reality

In the aftermath of Donald Trump’s re-election as President of the United States, calls for the European Union to strengthen its sovereignty and independence from the U.S. have multiplied. French President Emmanuel Macron reiterated those appeals in his remarks on November 7 in Budapest during the European Political Community summit. However, the stark contrast between the swift formation of Trump’s future administration—pending Senate confirmation—and the EU’s slow progress in appointing its new European Commission underscores the bloc’s internal divisions. Originally scheduled to take office on November 1, the new Commission’s inauguration has been delayed to December 1, as political groups within the European Parliament remain deadlocked.

Despite the ambitious priorities laid out by Ursula von der Leyen and the designated commissioners during their hearings, the EU’s leadership appears fragmented both in the Council and the Parliament. This lack of cohesion has relegated the Commission’s agenda to the background at a time when stronger leadership is desperately needed.

A divided Parliament

The nomination of the European Commission has been significantly delayed. Although 18 out of 19 commissioners-designate received validation from the European Parliament after their hearings, the confirmation of seven vice presidents and the Hungarian nominee, Olivér Várhelyi, remains uncertain. Várhelyi, designated for the health and animal welfare portfolio, is awaiting the resolution of a political agreement among Parliament’s groups.

Beyond the Hungarian candidate, debates continue over the nominations of Spanish socialist Teresa Ribera and Italian ultraconservative Raffaele Fitto. Ribera faces scrutiny for her role in addressing recent severe floods in Valencia, while Fitto’s affiliation with Georgia Meloni’s Fratelli d’Italia party raises concerns due to its alignment with the European Conservatives and Reformists (ECR), a group not part of von der Leyen’s coalition. The center-right European People’s Party (EPP) has focused its criticisms on Ribera, while the center-left Socialists and Democrats (S&D) opposes both Fitto and Várhelyi.

The S&D’s red lines include rejecting Fitto’s vice presidency, citing his far-right party’s opposition to Von der Leyen’s election as Commission President. Similarly, they have vowed not to support Várhelyi, even if his portfolio is revised to exclude health responsibilities. The S&D is also wary of sustained attempts by conservatives to collaborate with the far-right factions, including the ECR and other nationalist groups, on key legislative texts.

A political agreement may not be reached until November 20, following Ribera’s testimony before the Spanish Parliament on the management of deadly floods that struck the country earlier this month. While the initial schedule for the Parliament’s plenary vote on November 27 in Strasbourg remains tenuous, there is still hope that the new Commission can take office by December 1. However, the byzantine political maneuvers have already weakened the Commission’s standing, overshadowing the ambitious vision articulated during the hearings.

A weakened Council

In the European Council, traditional powerhouses like France and Germany are at a standstill, further complicating the EU’s ability to act decisively. French President Emmanuel Macron’s domestic challenges following the dissolution of the National Assembly in June 2024 have significantly weakened his influence on the European stage. Similarly, German Chancellor Olaf Scholz, who has called for general elections in February 2025 following his dramatic falling out with his finance minister, lacks the political capital to take bold European initiatives.

The diminished roles of these traditional drivers of EU policy have elevated the influence of other member states, some of which hold polarizing positions regarding the United States. Hungarian Prime Minister Viktor Orban, Europe’s foremost proponent of “illiberal democracy” and currently holding the EU Council presidency until December 31, openly celebrated Trump’s victory. Countries like Italy and Poland are also poised to capitalize on this power shift, further fragmenting the EU’s collective voice.

Foreign policy in the Trump II era

Against this volatile backdrop, the designated commissioners began their hearings on November 4, concluding with the highly anticipated presentations by vice presidents on November 12 and 13. Their statements underscored the ambitious priorities of the new Commission across foreign policy, economic strategy, and environmental goals.

High Representative Kaja Kallas from Estonia underscored the EU’s need to bolster its geopolitical and economic security, emphasizing the importance of defense investments and stronger international cooperation. She identified Russia, Iran, North Korea, and China as primary threats to the global rules-based order. Additionally, Kallas reiterated that Ukraine remains central to the EU’s foreign policy, calling for unwavering military, financial, and humanitarian support in the face of uncertainties about continued US aid under Trump.

Lithuanian Defense and Space Commissioner-designate Andrius Kubilius echoed her call, advocating for a unified European defense strategy. He committed to presenting a white paper on the future of European defense within his first 100 days, aiming to enhance NATO deterrence and build the EU’s own defense capacities.

Circling the economic square

On the economic and environmental fronts, Vice President-designate Stephane Séjourné unveiled plans for a “Clean Industrial Deal” designed to advance decarbonization while reindustrializing Europe. While the details remain vague, Séjourné emphasized the importance of focusing on strategic sectors with high socio-economic potential, such as electric vehicles and heat pumps, as well as the need to reduce energy costs to enhance European competitiveness.

Spanish candidate Teresa Ribera, slated for the executive vice presidency on clean, fair, and competitive transitions, proposed sweeping reforms to EU competition policies to create a fairer global market environment. Ribera reaffirmed commitments to the European Green Deal, proposing a European Adaptation to Climate Change Plan and the ambitious goal of reducing greenhouse gas emissions by 90% by 2040. She also proposed updating state aid rules to support innovation while countering practices that stifle competition. However, achieving these goals amidst a fragmented Parliament remains a challenge.

In addition to internal divisions within the European Parliament and Council, the Commission’s vision is also undermined by disputes over financing these priorities. In September, former European Central Bank president Mario Draghi published a seminal report calling for “more coordinated industrial policy, more rapid decisions and massive investment” lest the EU face a “slow agony”. However, frugal member states have already balked at his proposals for EU-wide borrowing, adding another layer of complexity to the EU’s efforts to realize its international ambitions.

Challenges ahead for EU leadership

The ongoing validation process for the new European Commission will serve as a litmus test for the balance of power within the EU. As political groups and member states negotiate fragile compromises, the Union’s capacity to assert itself on the global stage remains in question. For now, the EU appears mired in institutional inertia, struggling to reconcile its lofty ambitions with the realities of fragmented leadership and limited resources.