Czech Business Today

The first State of the Union address of Ursula von der Leyen’s second mandate was delivered against the backdrop of global trade uncertainty, rising geopolitical tensions, and ongoing divisions within the EU on sensitive issues such as migration. While the speech aimed to provide a unifying narrative for Europe, Czech business circles listened closely to assess whether the announced priorities will bring tangible progress or remain at the level of political declarations.

For Czech industry, the most striking element was the significantly stronger emphasis on defence and security. Given the ongoing war in Ukraine and instability in the Middle East, this shift is considered both logical and necessary. Yet the proposal to establish an Eastern Flank Watch comes late, years after business associations had already taken steps to strengthen Europe’s resilience. The Confederation of Industry of the Czech Republic, as a co-founder of the North East Flank coalition together with partners from Poland, the Nordics and the Baltics, is well positioned to contribute to EU defence industry initiatives and to support closer cooperation with NATO. At the same time, Czech businesses remain cautious, questioning whether the Commission will be able to move beyond symbolic gestures and demonstrate real capacity in security and defence.

Economic competitiveness remains another area of concern. Czech companies see Europe’s strength and security as dependent on its economic performance, but von der Leyen’s address offered only mixed signals. The promise of omnibus legislative packages that should cut red tape and save companies €8 billion annually was welcomed, yet – accounting only for 5 % of the current business compliance costs – many entrepreneurs doubt whether this will offset the burden of ongoing regulatory expansion. Businesses are already heavily affected by ESG reporting and other administrative requirements, and there is frustration at the lack of deeper reflection on Europe’s energy policy, which continues to undermine competitiveness. A positive surprise, however, was the explicit recognition of nuclear energy as a baseload of the renewable energy mix for the first time in the history of her annual Union addresses. For Czech industry, long a proponent of nuclear as a stable and clean source, this acknowledgement marks a long-awaited breakthrough.

Migration, another central theme of the address, is perceived by Czech businesses as a double-edged issue. While effective control of illegal migration is seen as essential for maintaining public trust, industry representatives stress the equally urgent need to develop a functioning system of legal migration for skilled workers. With persistent labour shortages in many sectors, Czech employers regard this as a prerequisite for growth and competitiveness.

What was missing in the speech, from the perspective of Czech business, was a stronger focus on external economic partnerships and trade. In a time when the EU’s global competitiveness is being tested, the absence of references to enlargement, neighbourhood policy, or Global Gateway projects raised concerns. Czech companies would also welcome a clearer communication strategy to support the ratification of trade agreements already negotiated, so that years of talks and significant public resources are not wasted.

The accompanying Letter of Intent sets out a broad range of priorities for 2026, including a Single Market Roadmap, an Industrial Accelerator Act, new rules for cloud services and artificial intelligence, as well as a European Defence Readiness Plan. Social and environmental initiatives also feature prominently. For Czech businesses, however, the decisive question is whether these initiatives will truly reduce administrative burdens and strengthen competitiveness, or whether Europe will continue with “business as usual.” Von der Leyen titled her speech “From promises to progress,” but Czech employers will judge her Commission by whether this promise translates into real, measurable improvements for companies operating in increasingly difficult global conditions.

Source: The Confederation od Industry of the Czech Republic