On 20 June the European Commission presented its strategy for the security of the European economy. Following the Russian aggression against Ukraine, the risks of the dependence of the European economy on Russian gas have emerged: many member states have realized that they are dramatically exposed to the Kremlin’s energy blackmail, finding themselves forced to diversify their sources of supply within a few months.
More than a year after the invasion, the European Union and the Member States have been able to face the Russian blackmail by limiting the damage of abandoning a development model which in many economies also had among its enabling factors the exploitation of cheap gas in Moscow. However, the lessons learned over the past year have highlighted the huge dangers that the European economy runs when it is excessively tied to trade with third countries that have political plans in antithesis with European values and prospects. In an increasingly competitive international context, which sees the multiplication of potentially hostile state actorsthe Commission has opened the debate on the development of countermeasures capable of allowing the Union and the member states to protect the economy from future political-economic shocks on a regional or global scale.
What does economic security mean?
The strategic objectives of the plan launched by Palazzo Berlaymont are the safeguarding the European economystrengthening its competitiveness and defending the Union’s ability to deal with acts hostile to the European vision of the international order without running the risk of finding itself choosing between safeguarding its political objectives and that of its economic interests.
Specifically, the Commission intends to develop tools for protect supply chains, prevent the theft of sensitive technologies, especially those for civil-military use, reduce the risk that third countries politically blackmail the Member States by leveraging economic relations. To do so, Brussels plans to investing in the European techno-industrial complex to stimulate research and development of new technologies and aims to intensify cooperation with long-standing international partners with whom it shares values and political visions.
The Commission proposal includes mechanisms for identifying sensitive technologies and assessing the risks of exporting them to third countries, as well as further coordination mechanisms with the private sector in order to support European strategies. The Berlaymont also intends to propose further regulations and structures to facilitate cooperation between the Commission and member states in screening inward and outward investment, including the establishment of asole intelligence agency dedicated to identifying threats to the economic security of the Union.
The political implications of de-risking
The Commission’s note represents only the embryonic phase of a discussion that will see a close confrontation between States and institutions in the coming months to arrive at a synthesis that makes the Brussels doctrine operational. The discussion promises to be intense and it is unlikely that an agreement will be reached in the short term. Indeed, many Member States are cautious with respect to the Commission’s proposal. The reasons for the caution are many.
The Brussels strategy is clearly oriented towards de-risking in relations with China, a partner of great importance for many countries of the Union, including the two main economic powers of the continent: Germany and France. Berlin itself has had the opportunity to repeatedly signal its skepticism with respect to a reduction in trade with China: at the end of 2022, Chancellor Scholz went on a visit to Beijing accompanied by a large group of entrepreneurs, emphasizing the German willingness to continue to do business with China and the Seventh Sino-German bilateral consultation was also held in Germany on June 20 to discuss new economic prospects. The reason for Scholz’s reluctance is clear: a tenth of German companies ed one million jobs in Germany are directly or indirectly dependent on relations with China.
Other states, on the other hand, see President Von der Leyen’s proposal as the umpteenth appropriation by the Commission of competences that are the domain of the member states. The Economic Security Strategy is only one of the latter provisions of a markedly supranational nature that the Von der Leyen presidency has undertaken in policy-making areas in which until shortly before the pandemic it was unthinkable for the Union to have even a coordination role. Those member states who see the Union’s historic vocation for free trade as one of its main strengths also view the Commission’s measures with suspicion.
The new strategy of the Union will be debated for a long time within intergovernmental and supranational institutions and it is uncertain what shape it will take. It certainly represents a historic change of pace for the Union in dealing with international trade. A paradigm shift destined to have consequences also in the EU’s external relations: just a few days after the announcement of the plan Beijing, not surprisingly, unilaterally canceled the visit of the High Representative Borrell without providing any explanation.
Cover photo FABIO CIMAGLIA