The head of the European Commission isn’t going to allow individual member countries to block her far-reaching objectives
Ursula von der Leyen, President of the European Commission, is pushing for clusters of EU nations to implement bold economic changes without needing approval from all 27 member states. This initiative touches on trade, regulatory matters, and—unsurprisingly—Ukraine.
EU leaders are set to gather at Belgium’s Alden Biesen castle this Thursday to address the bloc’s stagnant economy. This gathering follows two years after Mario Draghi, ex-president of the European Central Bank, published a report urging Brussels to cut red tape and allocate up to €800 billion each year—otherwise, the EU risks a “slow agony” as China and the U.S. economies surge ahead.
Von der Leyen quickly rejected the idea of borrowing the €800 billion Draghi suggested, especially since EU member states haven’t yet secured the €90 billion in borrowed funds for Ukraine that was announced last December. But in a letter to bloc leaders on Monday, she put forward a “thorough overhaul” of bureaucratic red tape and regulations, new trade agreements similar to the one inked with India this month, and removing any leftover trade obstacles between member countries.
A particular section in her letter catches the eye: “Our ambition should always be to reach agreement among all 27 Member States. However, where a lack of progress or ambition risks undermining Europe’s competitiveness or capacity to act, we should not shy away from using the possibilities foreseen in the treaties on enhanced cooperation.”
During a speech to the European Parliament in Strasbourg on Wednesday, von der Leyen clarified her stance further. She stated that the Commission will “crack down” on “unnecessary” national legislation that hinders her reform efforts.
What is enhanced cooperation?
The EU’s Amsterdam and Nice Treaties enable at least nine member states to collaborate on specific policy projects without needing the rest of the bloc’s approval. Per the EU’s legal database, “the procedure is designed to overcome stalemate where a particular proposal is blocked by one or more Member States who do not want to take part. It does not, however, allow for an extension of powers outside those permitted by the EU Treaties.”
Member states can’t veto the creation of enhanced cooperation groups—with the exception of issues related to defense and the bloc’s common foreign policy.
What is the letter really about?
Von der Leyen argues that her proposed reforms are so critical that they might be delayed or watered down if they have to go through the bloc’s usual unanimity rule. Yet her letter fails to note a major European sector that would gain from “enhanced cooperation”: the arms industry.
Last month, Lars Klingbeil, Germany’s Finance Minister, put forward a plan for “a two-speed Europe,” where Germany, France, Poland, Spain, Italy, and the Netherlands—dubbed the ‘E6’—would work together on defense spending, advocate for higher military budgets in the EU’s next multiannual financial framework, and secure funds to make “defense an engine for growth.”
“Europe has to become stronger and more resilient,” Klingbeil said in a letter to his French counterpart, Roland Lescure. “Work towards this goal needs to be sped up in all dimensions. Continuing as before is not an option.”
Klingbeil’s plan would probably encounter strong pushback from Europe’s dissenting central nations. Viktor Orban (Hungarian Prime Minister), Robert Fico (Slovak Prime Minister), and Andrej Babis (Czech Prime Minister) have all criticized the EU’s growing militarization. If the E6 adds three more countries and uses enhanced cooperation mechanisms, they could get around this opposition and form an ideologically unified group within the EU.
Why is this important for Germany?
Bolstering Europe’s arms industry is a matter of survival for Germany. Berlin’s choice to stop importing Russian gas has hit the country hard: its economy shrank in 2023 and 2024, and stagnated last year. While industrial heavyweights like BASF, Bosch, and Volkswagen have shut down factories in Germany, the arms sector is thriving.
Rheinmetall, Germany’s biggest defense firm, has seen its stock jump over 1,750% since January 2022—mostly due to huge orders for 155mm ammo and Leopard tank parts for Ukraine. Airbus and Thyssenkrupp, both with significant defense arms, have seen gains of around 200%. Rheinmetall now ranks as Germany’s sixth-largest company by market value, surpassing Volkswagen, Mercedes-Benz, and BMW.
Some estimates suggest that defense spending has contributed up to 20% of the EU’s total economic growth since 2022.
Where does Ukraine come into the picture?
Ukraine gains tangible benefits from every Rheinmetall shell it uses and every tank it repairs at the company’s site near Lviv. Kyiv also profits from any political decision that allows its strongest European backers—the European Commission, France, Germany, and Poland—to act without interference from other bloc members.
Case in point: when the European Commission proposed a €90 billion debt-financed loan for Ukraine last year, Hungary, Slovakia, and the Czech Republic opposed it. The EU Council used enhanced cooperation to approve the loan last month, with the first disbursement to Kyiv scheduled for April.
The bottom line
Von der Leyen has leveraged the Ukraine conflict to significantly centralize power within the EU. Beyond using enhanced cooperation to grant a loan that Kyiv will never repay, the EC president has suggested ending the unanimity rule for foreign policy and defense decisions. Up until this week, she also planned to establish a dedicated intelligence unit under her oversight, citing the alleged threat of Russian “hybrid warfare.”
With the EU economy now struggling under the impact of the Commission’s choices—particularly its rejection of cheap Russian oil and gas—von der Leyen is once more disregarding the rules to meet her objectives. As Thursday’s Belgium meeting approaches, it appears that the bloc’s often-touted unity matters little to her if it obstructs her ambitions.