Von der Leyen Announces Housing Act, Care Deal and AI Caution in State of the Union Address
An EU institution building in Brussels (file photo; illustrative of the European Union, the address itself was delivered to the European Parliament in Strasbourg). Photo: Fred Romero, CC BY 2.0, via Wikimedia Commons
European Commission President Ursula von der Leyen used her State of the Union address to unveil a first-ever EU Housing Act, a European Care Deal, an AI "pacing" call, and confirmation that European defense spending has risen 80% in five years.
European Commission President Ursula von der Leyen delivered her State of the Union address to the European Parliament on Wednesday, unveiling a wide-ranging set of proposals spanning technology, housing, climate and defense. On artificial intelligence, she called for "pacing the development of frontier AI models," citing safety concerns and noting that "CEOs of the most advanced companies tell us that it is time to slow down on the self-recursive models."
On social policy, von der Leyen announced a European Care Deal addressing the bloc's demographic challenges, marking the tenth anniversary of the EU's social rights pillar, alongside the first-ever European Housing Act aimed at short-term rental speculation that has squeezed housing supply in many EU cities. A new European Water Initiative and Climate Resilience Framework, identifying the 100 most vulnerable European territories, were paired with a Climate Insurance Alliance meant to close a gap in which only about 25 percent of European catastrophe losses are currently covered by private insurance.
On the economic front, von der Leyen previewed the EU's 2028-2034 long-term budget, which will require new EU-level taxes described as "own resources," alongside a Savings and Investment Union intended to help European companies scale and a simplification agenda projected to cut roughly €17 billion a year in administrative burden. On China, she said the bloc's trade deficit, now running at roughly €1 billion a day, has "reached a tipping point," warning that "words are good. But deeds are better." She also confirmed European defense spending has risen 80 percent over five years.
Taken together, the address reads as an attempt to address anxieties on multiple fronts at once, AI safety, housing costs, climate risk and China's trade surplus, while also signaling to a more security-conscious electorate that defense investment is no longer treated as an afterthought. Whether an EU already navigating a new long-term budget fight and an AI industry unlikely to slow down voluntarily can deliver on that breadth of ambition is the harder question left for the months following the speech.