The European Union at a crossroads: how can we ensure economic security?

In 2023 the EU launched its European Economic Security Strategy, committing to performing a thorough review of the possibilities for strengthening its economic security, driven by the wide-scaled geopolitical and geo-economical changes. Building and deepening political and economic alliances with like-minded states and regions, sharing similar European values, seems to be the only viable strategy. In today’s growingly connected, digital, AI-governed world, the mutual interdependencies neither can be ignored, nor can they be framed within protectionist policies and measures. Therefore, the recent trade agreements with Mercosur, India, Canada, Australia and African Union states are right enough and must be further developed. 

Defining economic security

The EU Commission has not clearly defined economic security, focusing more on tools and measures to better identify, assess and manage risks in certain high-risk areas. For the EESC, economic security is the EU’s preparedness, resilience and response capacity to address a diversity of risks and disruptions caused by geopolitical and geoeconomic developments to the EU economy, and consequently to people and society. In our Opinion REX/614 Strengthening EU economic security we stress the need to strengthen the horizontal foundations of economic security, to better manage diverse and unprecedented risks. We also highlight that economic security must be grounded in effective and coherent governance and democratic oversight and encompass the foundational values and core objectives of the EU.

Europe must re-assess and maximise its possibilities, resources and reserves, by taking up the technological progress advancements to mobilise its critical raw materials stocks and pockets in order to develop, promote and nearshore critical value chains. There is no other way but strengthening the competitiveness as an imperative for sustainable economic development. Economic security can only be achieved by undertaking swift integral actions to boost innovations, provide safe and affordable energy, digital progress and AI application, develop trade and multilateral relations and recognise the relationship between economic and geopolitical security. There is no economic security without macroeconomic stability and production capacity development in order to nurture open and operational single market. This is the only way to affirm Europe as the best place for living and for doing business.  

Urgent and integrated action

Given the developments since the launch of the European economic security strategy in 2023 and considering the messages set out in the EESC opinion  on the strategy, it has become increasingly important to take urgent action to strengthen the EU’s economic security by completing and implementing the projects and processes going on in several policy fields and by embedding economic security as a central objective in all upcoming initiatives.

An integrated approach to economic security calls for close cross-sectoral cooperation within the political and administrative structures, as well as effective use of the wide range of tools and instruments, without creating additional bureaucracy. EU institutions should make the best possible use of existing information exchange and cooperation structures and mechanisms instead of creating new ones. 

More effective and results-oriented coordination between the EU and national levels is necessary to ensure coherent implementation of economic security measures in practice. Political unity, based on shared and clear priorities, is increasingly vital, given the need to cope with coercive and divisive foreign actions.

Navigating through troubled waters

Finding the best way out of the multiple crisis requires strong and decisive leadership and pragmatic ideas for the way forward. From a business perspective, cutting red tape and administrative burden is urgent. However, there is a risk to slip towards two-speed Europe that will favour development of bigger economies at the expense of smaller ones that will deepen the divergence and create new problems. To overcome these dangers, a broad consensus about the future support measures is required. For example, the overall development of the critical infrastructures – physical, digital and innovative – is of vital importance for the economy, the society and the right to stay. 

Green pragmatism

Undoubtedly, there is also a need for green policy. However, the EU is only accountable for about 7% of global greenhouse emissions and cannot prevent alone climate changes. Therefore, major commitment is needed to activate climate diplomacy, to give new momentum to the work of the global organisations and to guarantee the implementation of the international agreements. Only coordinated global actions can guarantee that Europe’s efforts will be of value and will bring more benefits in tackling climate related hazards than risks.

By Milena Angelova, EESC Employers' Group member and Rapporteur of Opinion REX/614 Strengthening EU economic security.