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Policy Paper
March 2024

Making European Economic Security a Reality

François Godement
Special Advisor and Resident Senior Fellow - U.S. and Asia

François Godement is Institut Montaigne’s Special Advisor and Resident Senior Fellow - Asia and America. He is also a Nonresident Senior Fellow of the Carnegie Endowment for International Peace in Washington, D.C., and an external consultant for the Policy Planning Staff of the French Ministry for Europe and Foreign Affairs.

Now is the time, when one considers Europe’s need for economic security. Russia’s war on Ukraine, China’s increasing acquisition of sensitive technologies, its coercive use of economic leverage are all threats to Europe’s security. Civil-military fusion, and critical technologies link economic security and defense concerns. Europe also faces the challenge of large US investment capacities and extraterritorial legislation – as well as their Chinese equivalent.
The Commission therefore created defensive rules, and launched a strategy in June 2023. Its January 2024 proposals mostly address the defensive side, with measures to "protect" while maintaining openness to like-minded countries on the "partner" side. The offensive and "promotion" side is less directly involved here.
Identifying supply chains or critical technology risks requires information not easily obtained. Companies beware of defensive measures that could hinder their outward exports and investments, and are reluctant to sharing sensitive information. Member States whose companies may suffer a backlash from defensive measures are also cautious. Some "frugal" states, including Germany, are reticent at EU budget expansion. Others, such as France, are unwilling to give more decision-making power to European institutions.
Building on interviews with policymakers, this policy paper from François Godement deciphers European debates on de-risking, while laying down a realistic course for coordinated action between the EU and Member States. It suggests incremental steps rather than a choice between defensive and offensive measures. In the short term, consolidating the EU’s defensive toolbox requires Member States to put much more in common. The offensive side, involving innovation and industrial policies, requires a longer time frame and vast resources. A debate looms ahead with other competing goals: greening transition, defense, structural funds, welfare. In any case, cooperation inside the EU and with outside partners is unavoidable to diversify and innovate.


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