The EU’s new political term has officially kicked into gear. 2025 is set to be a particularly tumultuous year, yet one where Europe has a unique opportunity to rise to multiple challenges. Not least among them will be demonstrating that an accelerated clean transition is a viable pathway towards lasting stability, security and cohesion.
This orientation briefing sets the scene for what tests are likely to drive EU politics in 2025 and thus have the greatest impact for climate action. It also analyses how national, EU-level and international politics will shape this landscape.
Four tests the EU will face in 2025
The EU has turned the political and institutional page; the executive has rolled up its sleeves and is set to begin issuing plans and actions over its “first 100 days”. Despite the adversarial political landscape, all parties might be able to agree on one thing: In 2025 Europe faces a series of tests that will determine its pathway and place in the world for years to come.
1. Finding the investment for future prosperity
Mario Draghi has clarified that an additional €800 billion annually will be needed for the EU’s competitiveness. The many investment needs are the enabling thread connecting all Europe’s strategic priorities, reflected also in Commission President Von der Leyen’s call for an “Investment Commission”. Resourcing these needs will require a coherent investment strategy and a break from the status quo in several politically challenging areas.
Hawkish EU leaders will have to acknowledge the need for a larger and more agile EU purse. In addition, the set up of new and existing funds, upcoming state aid reform, and the European Investment Bank will be crucial in channelling funds. To mobilise Europe’s Capital Markets Union, member states will have to overcome division and strengthen a more centralised supervisory body, while also working to align capital markets with Europe’s transition strategy.
2. Simplifying regulation without sacrificing integrity
Von der Leyen has made “reducing administrative burden and simplifying legislation” a priority of her new team. While Commissioners are adamant that this “won’t mean deregulation”, some industrial and political actors are calling for a rollback or postponement of key Green Deal policies.
Other industrial players worry that re-opening legislation risks undermining policy effectiveness and creating uncertainty, while forcing them to restart their adaptation to Green Deal rules.
Policymakers must remain vigilant and distinguish legitimate business concerns from environmentally regressive agendas. Greater consistency across EU laws, sector-specific standards, tackling overcompliance and increasing digitalisation could all help overcome complexity without reducing substance.
3. Strengthening coordination for an EU that forges its own path
Draghi framed Europe as facing a choice between “exit, paralysis, or integration”. The political conditions for further European cooperation are not ideal, but the value case has never been stronger. EU and national elections in 2024 have seen the rise of Eurosceptic and nationalist groups in several key countries and left the bloc more fragmented. Meanwhile, the incoming Trump administration will test EU unity.
But a joint EU approach holds significant benefits for the European economy and its position globally. Staying the course on the clean transition, for one, will lead to structurally cheaper and more secure energy. Fundamental building blocks such as integrated infrastructure planning on grid expansion, electrification, and a plan for hydrogen use and gas phase-down will depend on pan-European buy-in that leverages the unique strengths of member states and regions.
4. Navigating heightened global competition and security concerns while enabling international cooperation
Spurred by geopolitical shifts and security concerns, the EU has established a “de-risking” strategy to build up and protect its domestic industry. At the same time, President-elect Trump’s pledge to impose significant tariffs across all imports poses new risks to the EU economy. Europe’s ability to build strategic autonomy while also managing economically critical trade relations will be one of the new term’s hardest nuts to crack.
Moving too far in the direction of protective trade measures could raise costs and slow the clean transition, contributing to a perception of lagging EU climate action, and antagonising trade partners. A promising track lies in the European Commission’s planned new Clean Trade and Investment Partnerships and plans to strengthen economic ties with emerging and developing markets. Clean transition partnerships can help rebuild trust with the Global South, while addressing EU fears of overdependence on critical imports from China. They can also facilitate greater cooperation and ambition on the road to COP30 in Brazil.
Read the full briefing for more about the four tests.
2025 political outlook and key moments
The EU will prove its ability to stand up to these tests amid a complex mix of national politics, EU-level decisions, and international dynamics in 2025. Here we look at some of the critical political junctures ahead of these different levels of governance.
2025 starts as the third year of war in Ukraine, and the second in Gaza, pushing the EU to continue focusing on security and foreign policy in an increasingly tense geopolitical landscape. EU leaders will also pay great attention to the end of Al-Assad’s regime in Syria, and the prospects for stability in the region.
President-elect Trump’s return signals the possibility of trade tensions, an unstable NATO and an uncertain end to the Ukraine war. The anticipation of rapid, sweeping policy changes – affecting forums like the G7, G20 and COP30 – amplifies these concerns, leaving EU and member states’ officials bracing for unpredictability.
Throughout 2025, the EU will have opportunities to rebuild momentum and trust in global climate action on “the road to COP30” in Brazil. Putting international climate cooperation on track to fully address the escalating climate crisis will require targeted, impactful engagement to create the right political and economic conditions for third countries’ sustainable development. This will require the EU to present an ambitious and timely 2035 Nationally Determined Contribution (NDC) in line with its upcoming 2040 climate target, and to proactively engage with China and G20 countries. The EU’s impact will be affected by its ability to collaborate with emerging economies and developing countries in co-creating mutually beneficial Clean Trade and Investment Partnerships.
The first policy initiatives of the new European Commission will show how it intends to balance climate, security, simplification, competitiveness. The Competitiveness Compass (expected mid-January) will show President Von der Leyen’s take on how the EU can ensure its prosperity. A vision for the future of agriculture will follow, and then a large package on 26 February including a Clean Industrial Deal communication, a proposal for a Competitiveness Fund, and an “omnibus simplification package” meant to bring consistency to sustainability and due diligence reporting requirements. Other crucial developments are a legislative proposal for a 2040 emission reduction target and negotiations on the 2028–2035 EU budget (MFF) proposal.
The Polish and Danish Presidencies will drive political debate and prepare member states for agreement on the key choices they will make. The Polish Presidency will prioritise security in all its forms, and shape the orientation of upcoming policy discussions via Council Conclusions and informal events. The Danish Presidency is expected to focus more on climate action in the run up to COP30, and will prepare the first Council and European Council discussions on the next EU budget proposal.
The new European Parliament arithmetic will also be put to the test. The strengthened centre-right EPP group allows for building contradictory majorities with the centre-left and the far-right. This risks limiting the influence of climate-ambitious actors and hindering the Commission’s ability to build consensus around upcoming clean transition initiatives. The Parliament’s own initiative reports outlining its position as an institution will likely grab the spotlight in the first months of the year.
Elections in member states and national implementation of the transition will impact Europe’s climate-related debates. Elections across Europe will have an impact on the direction and rhythm of EU-level discussions, affect the level of political polarisation, and test vulnerability to Russian interference. Fragmented national politics and challenges in delivering the transition on the ground are also likely to reverberate in EU-level political debates.
Political instability in France and Germany weakens the duo’s traditional leadership in the EU at the start of 2025. In France, the lack of a stable parliamentary majority will make it difficult for both the national government and President Macron to take action domestically and at the EU level. Germany heads to the polls in February, but a new government may not be in full steam until late spring.
A distracted Franco-German engine will leave space for other countries such as Italy, Spain, Poland and Denmark to assume greater leadership. Poland and Denmark’s Presidencies give them a unique opportunity to step into a prominent role. However, Poland’s presidential election in May and Denmark’s local and regional elections in November risk shifting their attention to domestic issues. Commission President Von der Leyen will remain a strong figure throughout, but her capacity to drive change will depend on Commission unity and the ability to broker agreements with national governments and political groups.
Read the full briefing.
