Brussels proposed Tuesday to strengthen the arsenal of the European Union against threats to its economic security, in particular from China, announcing a future “initiative” to better control the investments of European firms abroad.
“We must ensure that European business capital, knowledge, expertise and research are not misused by certain countries for military applications,” said European Commission President Ursula von der Leyen.
“We are therefore working on the best way to build such an instrument and we will propose an initiative before the end of the year,” she said, without further details, during a press briefing.
The European executive also intends to carry out an evaluation of the foreign investment control mechanism which came into force at the end of 2020, in order to possibly strengthen it.
This tool aims to better control the investments of foreign firms in strategic sectors in Europe. But its scope is limited: the Commission does not have the possibility of blocking an investment, the last word resting with the Member States.
The Covid crisis in 2020 revealed the fragilities of European supply chains, victims of border closures in China, while the war in Ukraine showed the risk of dependence on Russia for gas supplies.
These crises “have opened our eyes”, acknowledged Ms. von der Leyen.
This strategic reflection does not officially target any country, but China is clearly targeted with its virtual monopoly on rare earths crucial for many technologies such as batteries or wind turbines.
“It makes sense to diversify our supply chains away from the single route to China,” said the Commission President.
The economic security strategy will be discussed at the next summit of European Heads of State and Government on 29 and 30 June in Brussels.
The Commission wants to develop with the 27 EU countries a common framework to assess the risks that could affect the European economy and establish a list of critical technologies.
It also intends to better control exports of dual-use goods, civil and military.
Many measures have already been adopted in recent years, the subject of economic sovereignty having gained in importance, supported in particular by France in the face of traditional supporters of free trade.
The European Union thus approved in early June the creation of a common instrument aimed at punishing any country using economic sanctions to put pressure on one of its members, as China did against Lithuania.
The Commission has also simplified the granting of State aid to strategic sectors such as electronic chips. In March, it proposed a text to secure its purchases of critical raw materials.
The new EU strategy raises concerns about a protectionist temptation and seeks a delicate balance. “Economic openness and integration into the world market are a strength for Europe. That will not change in the future, that is very clear,” insisted on reassuring Ms. von der Leyen.
Its strategy is also based on strengthening the European internal market. It insists on the development of partnerships and compliance with the rules of the World Trade Organization (WTO).
Brussels wants to find its own position on Beijing, despite pressure from the United States to take a hard line.
“We need a plan that allows us to resist economic tyrants”, but “if we completely disassociate ourselves from China, the European economy will suffer the consequences”, warned German Conservative MEP Markus Ferber.
BusinessEurope, the voice of European business, called on the EU to “carefully” consider Europe’s interests and competitiveness “before introducing additional restrictions on the export of goods and technology and on the flow of ‘investment”.
“The EU must strike the right balance between protecting its security interests and maintaining an environment conducive to trade and investment,” the organization urged.
An essential trading partner, China is also seen as a key player in cooperation on climate change.
Chinese Premier Li Qiang, visiting Berlin, said on Tuesday that his country attached “great importance” to ties with the European Union.
20/06/2023 15:36:37 – Bruxelles (AFP) – © 2023 AFP
