EU Unveils Economic Security Strategy

The European Commission, in conjunction with the High Representative, has published a Joint Communication outlining a European Economic Security Strategy.

The proposal aims to limit the risks originating from specific economic flows, especially amidst escalating geopolitical tensions and swift technological advancements.

Ursula von der Leyen, President of the European Commission, presented the new European Economic Security Strategy.  

"In light of changing risk profiles, we now require a strategic vision to manage these risks. Today, Europe is the first major economy to present a strategy on economic security," she declared.

The new strategy will focus on three areas: promoting, protecting, and partnering.

"We must ensure that the capital, knowledge, expertise, and research of European companies are not exploited by countries of concern for military applications. We are exploring the best way to construct such an instrument, and we will propose an initiative before the end of the year."

On the topic of partnerships, the President provided examples of how the EU plans to reinforce economic security partnerships, from enhancing research cooperation with others to fortifying trade relationships and diversifying supply chains.

The proposed framework targets the enhancement of the EU's economic foundation and competitiveness, safeguarding against risks, and building partnerships with an expansive array of nations to tackle mutual challenges and interests. Decisions regarding economic security will be guided by the fundamental principles of precision and proportionality.

The strategy is designed to assess risks in four key areas: supply chain resilience, including energy security; the physical and cyber security of critical infrastructure; technology security and leakage; and the weaponisation of economic dependencies or coercion.

The Commission, alongside Member States and the High Representative where appropriate, will carry out this risk assessment. It will also integrate input from the private sector and will be a dynamic and ongoing process.

To mitigate the identified risks, the strategy details a three-fold approach, which includes enhancing the EU's competitiveness, protecting its economic security, and partnering with a broad range of allies to strengthen economic security.

This strategy forms the basis for an in-depth discussion with EU Member States and the European Parliament to develop a holistic strategy to protect the Union's economic security. The European Council is set to discuss the strategy during its meeting on 29-30 June 2023.

Several new actions are outlined in the Communication, including the development of a framework for risk assessment, a structured dialogue with the private sector, and support for EU technological sovereignty.

The Communication also proposes:

• reviewing the Foreign Direct Investment Screening Regulation,
• exploring support for dual-use technology research and development,
• and instructing the EU Single Intelligence Analysis Capacity (SIAC) to focus on potential threats to EU economic security.

[Document]