Brussels proposes its first economic security plan. China in focus


The European Commission presented its first economic security strategy this week, focusing in particular on dual-use technology (which can also be used in the military sphere in addition to civil applications), strengthening controls on foreign investment and creating export control coordination mechanisms. Brussels’ response to Chinese instrumentalization of the economy. According to the EU, it is necessary to “reduce the risk” of tensions and conflicts without actually “separating” the economies of the Middle Kingdom and Europe. Experts have identified five main key areas for the EU’s economic security:
– supply chains, including energy;
– critical infrastructure and its security, both physical and in terms of resistance to cyberattacks;
– technological security;
– preventing the so-called “technology leak”;
– “instrumentalization of economic dependencies or economic coercion”. The European Commission pays special attention to issues that threaten not only the European economy, but also national security. “This may in particular concern the leakage of dual-use technologies, foreign direct investments that threaten security and public order, the export of dual-use items that can increase the military and intelligence capabilities of entities wishing to use these capabilities to threaten international peace and security,” the plan specifies. “We have learned how dependence can be turned into a weapon,” said Josep Borrell, EU High Representative for Foreign and Security Policy, referring to the lessons learned from Europe’s dependence on Russian energy. “When we’re not working together, we’re a playground [dla krajów trzecich – red.]. When we act together, we are a player,” said Margrethe Vestager, Executive Vice-President of the European Commission.

Export control

As part of its strategy, the EU executive announced that it will present a legislative proposal in the autumn to better coordinate export controls of dual-use materials, where “the need for faster and more coordinated action at EU level has become urgent” and “needs special attention”. Brussels is concerned about the “uncoordinated proliferation of national controls” and the risk of “loopholes”. But Member States are very conservative in their competences in security matters and will not make it easy for the Commission to try to perform its functions in this area. Brussels included in its strategy the need to develop – together with the Member States – a “list of critical technologies” for economic security and a number of possible measures to mitigate risks, and to revise the regulation on the screening of foreign direct investments. The EC expresses the same position as the United States that the EU should maintain its “technological advantage in critical sectors”. This is a joint message from US national security adviser Jake Sullivan, who urged Washington to be ahead of China by several technological generations. Accordingly, the EU “needs a comprehensive strategic approach to economic security, addressing threats and promoting its technological edge.” The EU recognizes that many of these ideas will be challenged by member states who fear the EU is moving into a protectionist dynamic. The Commission notes that there are inherent tensions between strengthening economic security and ensuring that the EU continues to reap the benefits of an open economy. EU experts believe that a balance between security and economic interests can be achieved if the Union achieves three objectives simultaneously: “Promoting our competitiveness, protection against threats to economic security, and partnerships with countries that share our concerns or interests in terms of economic security.

Investment control

The European Commission has not been able to present a legislative proposal regarding the control of investments from the EU to third countries. “The EU and Member States must also ensure that the capital, research, expertise and know-how of our companies are not used to fuel technological developments that enhance countries’ military and intelligence capabilities that could use them to undermine peace and security.” However, Member States are very reluctant to this measure, so the Commission has decided not to come forward with a legislative proposal for the time being, hoping to do so before the end of the year. To this end, the Commission will examine “what security risks may arise from external investment, in cooperation with Member States”. “A new special group of experts from Member States will be set up to assist in these tasks by creating a new, structured and confidential cooperation mechanism,” states Brussels in its document. Source: el confidencial

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