Press remarks by Executive Vice-Presidents Vestager and Dombrovskis and High Representative/Vice-President Borrell 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.

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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.

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Remarks by High Representative/Vice-President Borrell:

Thank you for this press conference in which I am participating with my colleagues – the [Executive] Vice-Presidents of the European Commission - more in my capacity as High Representative for Foreign Affairs and Security Policy – I want to stress that – than as Vice-President of the [European] Commission. 

In fact, it is important to note that security and defence are a competence of Member States. And as Margrethe [Vestager, Executive Vice-President in charge of Europe fit for the Digital Age and Commissioner for Competition] said, we are not here through this [Joint] Communication to engage in a battle of competences – certainly not – but it is important to know who can do what and in which basis, in which legal basis the different European institutions act. 

And certainly, it is a Joint Communication [in which] we have to put together the competences of the [European] Commission and the Member States. 

This is my role.

So, I am going to speak more as High Representative for the Security Policy because the point of view of the Commission has already been explained. First, by the President [of the European Commission, Ursula von der Leyen] herself, and afterwards by my two colleagues [Margrethe Vestager and Valdis Dombrovskis]. 

So, allow me to complement the point of view of the Commission with the point of view of the Member States.  

It is clear that – everybody - all Member States are fully aware that security is a concept that has new and multiple dimensions. 

Until recently, security was related to armies. The armies provide defence and you secure yourself through the capacity of fighting. 

But now, security has multiple new dimensions, and the economy is one of these dimensions.  

The traditional concept of security is being redefined. We can say that war can today be conducted by other means, apart from guns. And among the means to conduct war, aggression, is the economy. 

That is why we speak about economic security. Even, I would prefer to say ‘security through economics'. This is what it is about: how to secure ourselves through economic tools. 

And we need to do because we have had the COVID-19 [pandemic], Russia's war of aggression against Ukraine and increasing strategic, technological competition between the major economic powers. I do not have to name them. 

But it is clear that all of that has exposed us to excessive dependencies that can threaten our security in the broader sense.  

Remember, during the pandemic, suddenly we realised that not a single gram of paracetamol was being produced in Europe. And today, I can tell you that to increase the capacity of production [for] ammunitions, we lack critical materials that we are no longer [have] available inside Europe and has to be imported. So, this weakens our strategic autonomy. It poses economic risks and threatens our security. 

And through this Joint Communication – joint between the Commission and me, as representative of the Council –, we are seeking to balance our traditional [international] openness with instruments that secure our prosperity. 

These dependencies could be used by some as a leverage for coercion measures that could affect our strategic sectors in a very critical manner. So, it is important that we get prepared for that and at the level of the European Union, for the European Union as a whole, we should develop our own strategy, driven by our own interests and objectives, based on a long[-term] view of the world economy and with our relations with the rest of the world, because this strategy may affect clearly the relations with some countries. 

And I know that you have been asking about China. It is not about China, and I am sure you will give me the opportunity to explain why. 

We do not start from scratch. The European Union – and mainly, the Commission - has [already] done a lot.  

But now, the moment has come to build [a strategic and foresight approach]. And the core of this approach – as my colleagues have explained - is de-risking. I will not repeat their very good explanations.  

I only want to say that we have to deter and protect ourselves from external threats to our economy. For that, we have already quite a lot of tools, but we need new tools. 

We need new tools to address more effectively these emerging threats. 

Allow me to clarify also from a foreign policy point of view that we do not want to limit the development or prosperity of other countries, but we must be equipped to protect our economic security and our economic interests from the actions of some other countries. 

The objective is to assess security [issues] at the European Union level and in doing that, when we talk about European level [and] security, we are entering fully the realm of the Common Foreign and Security Policy (CFSP). 

The Common Foreign and Security Policy has clear instruments that we can use to this end.  

We can explore the targeted use of CFSP instruments, including restrictive measures – what we call colloquially ‘sanctions'. ‘Sanctions' do not exist in our treaties; they only talk about restrictive measures. 

We can use the Hybrid and Cyber Diplomacy toolboxes. We will use our Single Intelligence Analysis Capacity (SIAC).  

And more generally, we have to ensure the promotion of economic activity at the European level, integrating in our foreign policy agenda, and increasing the cooperation with third countries on economic security issues. 

Today, this Communication marks the first step, as you have said. The first step of a process.  

It is a conceptual framework that will include further reflection, analysis, discussions and, above all, consensus building among Member States.  

I will take personally care of that in my capacity as High Representative for Foreign Affairs and Security Policy. 

The Council will discuss this communication to take a stock of the proposals and see how and when they can be implemented. 

I want to signal that others states in the world have taken years in developing an elaborated approach to economic security and to put in place a complex institutional framework for its governance.  

It is of paramount importance that our partners understand our message and [that] they do not see this economic security strategy as a protectionist move. It is not.  

It is just a first step towards developing a European framework for economic security, to secure our economy. This will be a new paradigm for shaping our foreign policies in the years to come.  

Thank you.