In an effort to bolster the economic resilience of the European Union, the European Commission is set to reveal comprehensive plans that highlight increased scrutiny of foreign investments and stricter controls on exports and technology outflows, with a particular focus on rivals like China. The EU executive will present an extensive document for discussion, accompanied by a proposed law mandating all EU member states to assess and potentially block foreign investments posing security risks.
The upcoming legislation aims to establish a unified framework for screening foreign investments, with the goal of fostering economic security across the bloc. While not explicitly naming any specific country, the European Commission emphasizes collaboration with "reliable partners" and the pursuit of de-risking strategies, aligning with the bloc's objective to reduce economic dependence on certain global players.
Implementing EU-wide measures poses a challenge, given that member states traditionally guard their export and investment control competences. However, there is a growing recognition that the EU must leverage its collective economic influence to effectively compete with global powerhouses like China and the United States. Despite the complexities, one EU diplomat noted, "It's a complex matter that might take some time to progress. Implementation will be challenging, but there is a new geopolitical reality."
The European Commission initiated discussions on the EU's economic security in June, citing factors such as the COVID-19 pandemic, escalating geopolitical tensions, and cyber and infrastructure attacks as exposing new risks. The strategic approach involves enhancing EU competitiveness, diversifying supply and export markets, investing in advanced technologies like semiconductors, quantum computing, and biotechnology, and fostering closer collaborations with allied nations.