EU chief calls for more military independence amid new 'era of regional rivalries'

• Speaking at her annual "State of the European Union" parliamentary address, von der Leyen described the currrent environment of foreign relations as "a new era of hyper-competitiveness."
• During her hour-long speech, von der Leyen also asked China to be more concrete about its carbon neutrality plans.

LONDON — There is a new international order, where competition is fierce and some nations "stop at nothing to gain influence," European Commission President Ursula von der Leyen said Wednesday.

Speaking at her annual "State of the European Union" parliamentary address, von der Leyen described the currrent environment of foreign relations as "a new era of hyper-competitiveness."

"An era of regional rivalries and major powers refocusing their attention towards each other," she said, while adding that "recent events in Afghanistan are not the cause of this change — but they are a symptom of it."

The withdrawal of American and allied troops from Afghanistan fueled a much faster-than-expected takeover of the country by the Taliban. The whole process and subsequent evacuation efforts have raised concerns in the EU about its dependence on the United States in terms of defense and security.

As such, some EU leaders have resurfaced the concept of a strategic autonomy — the idea that the bloc needs to develop its own defense capabilities — and a topic that von der Leyen is keen to pursue.

"Witnessing events unfold in Afghanistan was profoundly painful for all the families of fallen servicemen and servicewomen," von der Leyen said Wednesday.

"Europe can — and clearly should — be able and willing to do more on its own … What we need is the European Defense Union," she said.

The topic is likely to be in focus in the first half of 2022, when France, a keen supporter of the idea, is in charge of leading the discussions at the EU-level.

The EU's economics chief, Paolo Gentiloni, told CNBC earlier this month that the bloc should step up its role on the geopolitical stage as the U.S. and other Western allies take a step back.

China's Climate Plan

During her hour-long speech, von der Leyen also asked China to be more concrete about its carbon neutrality plans.

The country has pledged to be carbon neutral by 2060, but for von der Leyen this is not enough.

"The goals that President Xi has set for China are encouraging. But we call for that same leadership on setting out how China will get there. The world would be relieved if they showed they could peak emissions by mid-decade — and move away from coal at home and abroad," von der Leyen told lawmakers.

She said that all major economies, including the U.S. and Japan, should present detailed plans toward carbon neutrality by the upcoming COP26 conference in Glasgow in November.

The EU has been leading this space, presenting in July a concrete set of measures to cut greenhouse gas emissions by at least 55% by 2030.

This topic is becoming increasingly more important as Europeans face higher energy bills amid a natural gas shortage and structural issues. This is raising concerns across the bloc as member states look ahead to colder temperatures in the coming months, which could result in even higher costs when the economy is still just resurfacing from the coronavirus pandemic.

The governments of Spain and Greece have already announced measures to offset some of the recent spike in energy prices. While Spain introduced temporary tax cuts, Greece said it would spend 150 million euros ($177 million) to cut energy bills for consumers over the next three months.

Mateusz Morawiecki, Poland's prime minister, claimed last week that energy prices were going up due to the EU's climate policies, Politico reported.

Frans Timmermans, who leads the climate policy portfolio at the European Commission, said Tuesday that "only about a fifth of the price increase can be attributed to CO2 prices rising."

"The others are simply about shortages in the market," he told the European Parliament.

"Had we had the green deal five years earlier we would not be in this position because then we would have less dependency on fossil fuels and natural gas," Timmermans said, arguing that the commission's climate plan would avoid such energy price increases.

Increasing chip production

Among the most surprising announcements on Wednesday was von der Leyen's intention to have a "European Chips Act" — a plan to boost production of semiconductors, but to also improve research, design and testing capacities.

Demand for chips has outgrown supply in the past months, which has impacted the production of many products, including cars, TVs and many other electrical appliances. This is a concern for the EU given that it is currently heavily dependent on international supply chains.

"While global demand has exploded, Europe's share across the entire value chain, from design to manufacturing capacity has shrunk. We depend on state-of-the-art chips manufactured in Asia. So this is not just a matter of our competitiveness. This is also a matter of tech sovereignty," von der Leyen said.

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