Ursula von der Leyen, the President of the European Commission, has introduced a controversial two-tier plan aimed at allowing subsets of EU member states to pursue ambitious economic reforms independently from the broader consensus of the European Union. This proposal arises from ongoing economic struggles within the EU, which are exacerbated by competition from global powerhouses like China and the United States. In light of these challenges, a meeting of EU leaders is set to take place to address the bloc's stagnating economy and explore potential avenues for revitalization.

The context for von der Leyen's proposal is framed by a stark warning from former European Central Bank President Mario Draghi, who highlighted the urgent need for substantial investment and regulatory reform—suggesting that without a commitment to investing up to €800 billion annually, the EU could face prolonged economic distress. Von der Leyen's response to this proposal was to resist any plans for new borrowing, pointing out that EU member states have not yet managed to finance existing commitments, such as the €90 billion earmarked for Ukraine, thereby questioning the feasibility of Draghi's recommendations.

In her communication to fellow EU leaders, von der Leyen advocated for a sweeping reassessment and reduction of regulatory barriers, alongside the pursuit of new trade agreements designed to bolster economic cooperation within the bloc. The implications of this two-tier approach could lead to a fragmented EU landscape where some countries advance economically while others lag, increasing the risk of divisions among member states regarding economic policy and integration, especially in light of external pressures from geopolitics and economic competition.