The new rules outlined by the EU Commission aim to strengthen the EU’s economic security in the face of growing geopolitical tensions and technological shifts. However, these measures also introduce potential threats that need to be carefully considered.
Geopolitical tensions
The President of the European Commission; Ursula von der Leyen, commented in the following way:
“China’s changing policies may require us to develop new defensive tools for some critical sectors. Where dual-use purposes cannot be excluded or human rights might be implicated, there will need to be a clear line on whether investments or exports are in our own security interests.”
This is just one example of geopolitical tensions that is growing at the moment. Where the new rules also present opportunities for the EU to strengthen its economic security and competitiveness, but it also could include potential risks.
Enhanced foreign investment screening
By improving the screening of foreign investments, the EU can better protect its critical infrastructure and strategic assets from hostile actors. This can help to deter attacks and maintain the integrity of the European economy. A potential risk is that it may discourage foreign investment and hinder economic growth. The Commission will have to balance between ensuring security and maintaining an open investment environment.
More coordinated approach to dual-use goods exports:
A more coordinated approach to dual-use goods exports can help the EU to better control the flow of these goods and prevent them from being used for illicit purposes. But this may lead to increased bureaucracy and delays for legitimate exporters. The Commission must carefully balance the need for security with the need for smooth trade flows.
Understanding potential risks associated with EU investments abroad:
By identifying and managing the potential risks of EU investments abroad, the EU can protect its interests and avoid unintended consequences. This can help to ensure that EU investments are used for positive purposes and do not contribute to instability or conflict. However, this process should be conducted in a transparent and non-discriminatory manner to avoid discouraging legitimate investment.
Research and development in dual-use technologies:
By supporting research and development in dual-use technologies, the EU can maintain its technological edge and develop new solutions to security challenges. This can help to strengthen the EU’s defences and protect its citizens. But this also raises concerns about the potential for these technologies to be used for malicious purposes. The Commission should carefully manage the balance between innovation and security.
In conclusion, the new rules outlined by the Commission present a range of potential threats and opportunities for the EU. The Commission should carefully manage these risks and opportunities to ensure that the EU’s economic security is strengthened while maintaining an open and innovative economy.
Source: European Commission
