Press remarks by Executive Vice-Presidents Vestager and Dombrovskis on Economic Security Strategy

Remarks by Executive Vice-President Vestager:

Today, we propose a European Economic Security Strategy.

The purpose of this strategy stems from a simple observation. In today’s fierce competition for the technologies we need the most, Europe needs to have an active role to shape the course of events.

Today’s proposal sets out our plan to de-risk – rather than decouple – our economic interdependencies. And to assert our position as a leader in the global technology race.

To achieve this, we can’t afford to be fragmented. We have seen several times recently how third countries try to “pick-and-choose” individual Member States, while others seek to “divide-and-conquer”.

When we don’t act together, we are a playground. When we do act together, we are a player. Europe needs a united strategy to build its strength. The strength needed to be a global player.

A few important general points before I lead you through what we plan to do.

  • First – We are focusing on the risks of our economic interdependencies being weaponized by third countries. So economic security is a narrower concept than economic resilience. The scope is deliberately targeted, and therefore does not cover wider risks such as climate change, pandemics or natural disasters.
  • Second – By jointly defining, and jointly tackling the risks, we secure our ability to trade and innovate openly in the world. So economic security is not about closing-in. Not about protectionism. As you see, it is rather the opposite.
  • Third – threats to our economic security can change over time. That is why we design this strategy to be country-agnostic. Having said that, we will use a geopolitical filter when assessing the risks. We can’t treat a supply dependency on a systemic rival the same way as we would on an ally. The risks we have identified reflect the behaviour we see in third countries. It is no secret that Russia has inspired our energy security concerns. Likewise, in March, President von der Leyen said that China presents particular technology security and technology leakage concerns.

The strategy proposes a framework, which starts with defining the risks. It outlines four types of risks.

  • risk to supply chains
  • risk to critical infrastructure
  • risk to technology security and leakage
  • risk of economic coercion.

The Commission, together with Member States, will assess the risks in each category. Sometimes this will be based on existing processes, in some cases we will need new ones.  To be specific, we will develop a new risk assessment process for a list of dual-use technologies, that are critical for economic security. This list will be based on narrow criteria such as the risk of being used for military purposes, or to violate human rights.  This list should be adopted by the Council by September. And by the end of this year, we should have a common completed risk assessments on each priority technology.

Once identified, we need to mitigate the risks. To do so, we will adopt an approach based on three Ps: promote, protect and partner.

  • First – We must promote our competitiveness and technological edge. We do this by deepening the single market, and using strategically our research, development and industrial tools. As part of the review of the Multiannual Financial Framework, today we have proposed a ‘Strategic Technologies for Europe Platform’, which will help us support the technologies and value chains that are crucial to the green and digital transition.
  • Second – We must protect our data and our technology. That’s why we need a more rigorous enforcement of the tools we already have. And develop new ones where necessary. Last week, we took determined steps on 5G security with specific measures towards Huawei and ZTE. The Commission will make proposals to increase research security, including as regards participation in EU programmes, the protection of sensitive Intellectual Property, and foreign interference in knowledge institutions.

The tools we will need to mitigate risks will comprise a mix of both EU-level and Member States instruments. This is not about changing competences but about having an approach to act in common. And therefore, have a chance to influence things globally.

  • Finally – we decide which fora we should use to partner up with other countries, starting with the most like-minded. The processes we have set up in the G7 and in our Trade and Technology Councils with the United States and India are obvious candidates for taking this work forward.

This communication is a starting point for a discussion. A discussion that begins next week in the European Council. And which we will then take forward with Member States and the European Parliament. This is our chance – and plan – to shape-up Europe to be a player in the current  geopolitical situation.

I will now leave the floor to Valdis.


Remarks by Executive Vice-President Dombrovskis:

Ladies and gentlemen,

This Communication aims to strike a fine balance.

On the one hand, we must retain – and, indeed, build on – our core strength as an open economy and trading superpower.

On the other hand, we need to address certain risks to economic security risks.

We’re operating in a less stable, less predictable, and less safe global environment.

Yet at the same time, global economic integration has never been deeper.

Economic flows and security are therefore increasingly intertwined.

This is why the EU has in recent years adopted several measures to protect its markets and economies. And now, we are presenting an overall strategy on economic security and de-risking.

The EU is one of the most attractive destinations for global companies and investment.

Our economies thrive on open and rules-based trade, on secure cross-border connectivity, and research and innovation collaboration.

We will continue to rely on trade and our unique Single Market to spur competitiveness and ensure access to important raw materials, inputs and technologies.

We also want our partners around the world to benefit from access to EU markets, capital and technologies.

So, we propose economic security actions that are proportionate and precise.

We should not overshoot or underperform.

Our first task is to build a shared understanding of risks at EU level.

To get there, we are committed to working with Member States and stakeholders, including the business community.

High risks will receive high priority. Low risks will receive low priority.

Once we achieve this shared understanding, we can build agreement on how to best address identified risks.

Internal and external policies will need to work in harmony.

We define this as promoting, protecting and partnering.

On the promote side, trade policy is key for economic de-risking and diversification.

On the protect side, we have already taken steps in recent years to strengthen our supply chains, critical infrastructure, and technological base.

We have developed tools on foreign investment screening, International Procurement and Anti-coercion.

As to the Foreign Direct Investment screening, since October 2020, the Commission and Member States have reviewed more than 1,000 transactions.

We are now evaluating this cooperation mechanism and will propose a review by year’s end to ensure that the Regulation remains fit for purpose.

At the same time, we invite Member States which do not yet have a national FDI screening in place – to establish it without delay.

Margrethe already explained our intention to work on a list of technologies critical to economic security and related risks.

Russia’s war against Ukraine demonstrates the increasing military potential of a range of strategic technologies.

In light of emerging threats, some EU Member States and third countries have stepped up national controls to limit export of critical technologies.

Export licences of dual use items are granted by Member States. And we fully respect this division of competences between the EU and national level.

However, latest developments show that there is a clear need for more coordinated action at EU level.

This is why we propose to work with Member States to fully implement the existing Dual Use Regulation.

And, to start a reflection on how to develop a more coordinated European approach, building on the existing framework and with a view of tabling a proposal by the end of this year.

By the same token, we also need to look at security risks arising from outbound investment.

We must ensure that our companies’ capital, research, expertise and knowledge are not used to fuel technological advances in countries which may use them to undermine peace and security.

To pave the way, we will examine these risks together with Member States, and on this basis propose an initiative by the end of the year.

We will consult widely with key stakeholders, including businesses. Indeed, the complexity of this task should not be underestimated.

Any action on economic security will be in line with our international obligations, including WTO rules.  Multilateralism is in Europe’s DNA.

This brings me to the third pillar of our strategy – strong and stable global partnerships.

In implementing our economic security strategy, we propose to cooperate with the broadest possible range of partners, including – but not limited to – long-standing like-minded countries.

We will continue to reinforce partnerships with developing countries, by strengthening initiatives such as the Global Gateway, Partnership for Global Infrastructure Investments, Critical Raw Materials Club and digital partnerships, and finalising trade negotiations where relevant.

Finally, we will continue our efforts to strengthen multilateral cooperation, including by pushing for reform of the World Trade Organization.

A well-functioning global rulebook will remain the best foundation to bolster economic security for all. Thank you.