This piece was co-authored by the APCO Brussels team.
The start of a new year allows for reflection on a variety of challenges that the last EU administration faced—a health crisis that exposed weaknesses in Europe’s supply chains, a stagnating economy following hikes in energy and food prices, a more globally competitive environment from East to West, far-right movements shaking up political norms, a war verging on Europe’s Eastern border and European industries vocalizing frustration with ambitious climate policies.
Of course, this period was not without its successes. EU legislation was introduced to regulate the enormous presence of online platforms in society, both to combat online harmful or illegal activities and promote fair digital markets. EU member state unity led to the development of the largest EU recovery instrument in history after the COVID-19 pandemic. An EU pharmaceutical legislative package was launched to revise decades-long rules on affordability and access to medicines. Brussels further paved the way in adopting legislation to regulate sustainable and responsible corporate behaviour.
2025—along with a new European Commission and European Parliament—allows Brussels to build on its success and reframe its priorities for tackling challenges. Fourteen project groups have been set up to help execute Commission President Ursula von der Leyen’s priorities, from a Clean Industrial Deal (instead of “green”) and artificial intelligence (AI), to a Defence Union and a European Savings and Investment Union. Renewed focus is also placed on hearing from, and trying to get the buy-in of, Europe’s many industries, including a revised competition policy that supports the global scaling up of European companies.
All of this suggests an EU agenda that is geared towards the interest of preserving Europe’s prosperity in a more divided and complex world. The outlook for 2025 suggests more focus on tools that will make Europe stronger—investment in the right places, a balance between industrial needs and climate goals, greater cohesiveness before a Trump-led America and a smarter approach to digital sovereignty.
The following presents a set of outlooks by APCO’s Brussels office in various areas for 2025.
Financial Services
On the financial services front, the EU’s main focus will be on the Savings and Investments Union, which is a rebranding of the decade-old Capital Markets Union (CMU) initiative aimed at creating a single market for financial services within the EU. The CMU lost steam after the exit of the UK—and the City of London—from the EU in 2016. Building on existing initiatives, this new framework seeks to mobilize savings towards investments that enhance the EU’s economic resilience and competitiveness. The focus is on integrating capital markets, improving cross-border investments and fostering sustainable finance. This initiative is seen as crucial for supporting the EU’s green and digital transitions, increasing productivity and ensuring financial stability across the EU’s member states—all with a view towards enhancing access to capital that can help combat Europe’s stagnating economy and increase its global competitiveness.
Technology
The previous EU administration successfully introduced a surge of legislation aimed at strengthening Europe’s digital sovereignty. Groundbreaking rules were adopted on online platforms, cyber resilience, data governance and AI. Though former President of the European Central Bank Mario Draghi escalated debate about the potentially burdensome impact of these rules in his report on The Future of European Competitiveness, there appears to remain steadfast dedication to seeing them through implementation.
As 2025 unfolds, the balance between fostering innovation and ensuring regulatory oversight will remain a central challenge for policymakers. While the push to streamline regulations and reduce administrative burdens for tech companies gains momentum, new initiatives targeting digital markets, e-commerce and consumer safety are poised to reshape the landscape further in 2025 and beyond.
Compliance with the EU’s digital regulatory framework will be a prime challenge in 2025. Complaints by American tech leaders of “censorship” and the “tariff-like” nature of the EU’s digital competition policy may lead to actual tariff retaliation efforts from the new Trump administration. Ongoing attempts to align international governance of AI with EU standards will resume, while efforts will increase to facilitate investment towards critical and strategic innovations such as quantum computing and biotech, in addition to supporting “deep tech” scale-ups.
Health
As 2025 begins, EU health policy is poised to prioritise resilience, innovation and equity, with transformative legislative actions on the horizon. At the forefront is the revision of the EU pharmaceutical legislation, accompanied by the Biotech Act, the Critical Medicines Act—prioritised by the new EU health commissioner but unlikely to meet the ambitious timeline of delivery within the first 100 days of the mandate—and the Life Sciences Strategy. The Council of the EU, led until June by Poland, will focus on the digital transformation of health care, health promotion, disease prevention and fostering debate on critical medicines, while striving to advance agreements on these pivotal initiatives.
This comes amidst concerns that Denmark, which takes over EU presidency in July, may prioritise defence and prosperity over health. Stakeholders continue to advocate for greater investment in health, emphasising the lessons of COVID-19. Meanwhile, with the European Health Data Space (EHDS) and Health Technology Assessment (HTA) files finalised, efforts will turn to implementation, unlocking data’s potential to improve patient outcomes and broadening inter-country collaboration on market access to medicines. Complementing these priorities, the newly launched action plan to protect the health sector from cyberattacks will bolster resilience, while sustainability, equity and the rollout of Europe’s Beating Cancer Plan will remain central to the EU health agenda in 2025.
Sustainability
Simplification of sustainability regulation is set to be the dominant topic across environmental policy in the EU in 2025. The EU’s competitiveness agenda will be underpinned by lowering barriers on compliance and reporting, particularly following adoption of the EU’s Corporate Sustainability and Due Diligence Directive (CSDDD), to allow the single market to act more efficiently. Lowering costs to operate in Europe—particularly electricity and raw materials—will also be a crucial element of flagship initiatives like the Clean Industrial Deal, planned for launch this February alongside the Competitiveness Fund as part of the EU’s future budget.
Despite recent assertions by European industry about burdensome climate policies, European authorities are signaling that they will not abandon the core environmental goals set under the European Green Deal, though an eye will be kept on both Washington and Beijing’s retreat from climate action in the interest of competition. It remains to be seen how much legislation can be made simpler without also lowering sustainability targets.
EU Politics
In 2025, the European Union will concentrate on managing a challenging geopolitical environment, characterised by heightened tensions and a surge in nationalist sentiment across the continent. Internal political dynamics, including national elections with electoral shifts towards hard-right and populist political forces, will significantly influence the year’s outlook in many of its member states.
The geopolitical challenges in the EU’s immediate neighbourhood will persist. It remains uncertain what new developments will emerge under President Trump’s new administration, or to what extent these will bring the Russian invasion of Ukraine to a (potential) halt. Regardless of the outcome, the EU is compelled to substantially strengthen its military capabilities to protect itself from prospective offensive actions.
Overall, the European Union will reorient its priorities towards augmenting global competitiveness, particularly amid threats of trade protectionism and increasing production costs for businesses. Previous initiatives aimed at greening the economy to address climate change will increasingly come under scrutiny from lawmakers, as numerous industries continue to struggle with maintaining production in Europe. Keeping inflation and energy prices under control, while ensuring that modest economic growth mitigates the growing risk of deindustrialisation, will remain at the top of the agenda over the coming years.
Geopolitics
2025 is poised to be a transformative year for the EU, marked by significant geopolitical shifts. The EU will face the challenge of navigating a complex global landscape, with a focus on maintaining unity and resilience amidst external pressures.
Key issues include managing the ongoing conflict in Ukraine and responding to an assertive China. The re-election of Donald Trump as U.S. president introduces a new wave of protectionist policies, which could destabilize already weakened political establishments in Europe and beyond.
The EU’s commitment to a rules-based international order will be tested, particularly as it seeks to balance relations with major powers while addressing internal economic and security concerns. Additionally, the EU will play a crucial role in global climate initiatives, leveraging its Green Deal as a diplomatic tool to foster international cooperation. The geopolitical competition between the United States and China will continue to shape the global landscape, with the EU striving to assert its influence and protect its interests in this dynamic environment.
