Brussels is poised to reveal an expansive European Economic Security Package (EESP) next week, featuring critical elements such as revised rules for foreign direct investment (FDI) screening and an « initiative on outbound investments. » Among the package’s highlights are recommendations on research security and a comprehensive white paper on dual-use research.
This development follows European Commission President Ursula von der Leyen’s introduction of the « European Economic Security Strategy » during the June 2023 College of Commissioners meeting. The strategy, grounded in three fundamental pillars, emphasizes promoting the EU’s competitiveness, safeguarding economic security, and cultivating stronger global partnerships and networks:
I. Promoting the EU’s competitiveness and growth through reinforcing the Single Market, supporting a resilient economy, and advancing the EU’s research, technological, and industrial base.
II. Protecting economic security through a spectrum of policies and tools, including targeted new instruments where necessary.
III. Establishing broad global partnerships to diversify and bolster mutual resilience.
In December 2023, the Executive Vice-President of the Commission, Dombrovskis, detailed the strategy’s objective during a European Parliament plenary debate, emphasizing the need to minimize risks in economic relations while maintaining openness and dynamism. The strategy identifies key risk categories, encompassing supply chain resilience, the security of critical infrastructure (both physical and cyber), technology security, and the weaponization of economic dependencies or coercion.
The initial implementation of this strategy prioritizes critical technology sectors such as advanced semiconductors, artificial intelligence, quantum technologies, and biotechnologies. Planned future initiatives include revising the FDI Screening Regulation and enhancing export controls.
Additionally, on January 19, 2024, Eurativ reported that the EESP recommends screening greenfield foreign investments in the EU, impacting sectors like solar and wind technologies, electric vehicles, and semiconductor investments by non-EU entities.
This, very likely, will pose challenges for Chinese companies seeking business and investment opportunities in Europe.
