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Tuesday, February 27, 2024

What are the 5 new initiatives proposed by the European Commission to strengthen economic security

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<p><strong>The Commission has approved five initiatives to strengthen the EU's economic security at a time of rising geopolitical tensions and significant technological change.</strong> </p>
<p>The package of measures aims to strengthen the EU's economic security while maintaining openness for <strong>trade, investment and research</strong>for the EU economy, in line with the June 2023 strategy to strengthen European economic security.</p>
<p>Today's proposals are part of a wider three-pillar approach to EU economic security by <strong>promoting< /strong> of its competitiveness, <strong>protection</strong> against risks and <strong>partnership</strong> with the widest possible range of countries to promote common economic security interests.</p>
<p> The initiatives approved today aim to:</p>
<ul type=

  • further strengthening the protection of EU security and public order by proposing to improve the control of foreign investment in the EU;
  • encouraging debate and action for more European coordination in the field of export controls, with full respect for existing multilateral regimes and Member States' prerogatives;
  • consultation with Member States and stakeholders to identify potential risks arising from outbound investment in a limited set of technologies;
  • promote further discussions on the way to bettersupport research and development in the field of dual-use technologies;
  • proposal to the Council to recommend measures toreinforce security of research at national and sectoral level.
  • Future EU actions will continue to take into account ongoing risk assessments and strategic coordination with Member States to reach a common understanding of the risks facing Europe and appropriate actions.

    Legislative proposal to strengthen the control of foreign investments

    Foreign investment in the EU benefits the European economy. However, some foreign investments may pose risks to EU security and public order. The Commission examined more than 1,200 foreign direct investment (FDI) transactions notified by Member States over the past 3 years under the current regulation for the control of FDI. Based on this experience and the extensive evaluation of the operation of the current regulation, today's proposal addresses the existing shortcomings and improves the efficiency of the system in the following ways:

    1. ensures that all Member States have a control mechanism, with better harmonized national rules,
    2. specifies the minimum sectoral scope in which all Member States must control foreign investment,
    3. extends EU control to investments by EU investors that are ultimately controlled by individuals or businesses from a third country.

    Monitoring and assessing risks from outbound investments

    The EU is one of the largest foreign investors in the world and recognizes the importance of open global markets. It also recognizes growing concerns about outbound investment in a limited set of advanced technologies that could enhance the military and intelligence-gathering capabilities of actors who might use those capabilities against the EU or to undermine international peace and security .

    Currently, this issue is not monitored or controlled at EU or Member State level. Therefore, the Commission's white paper on outbound investment suggests a step-by-step analysis of outbound investment to understand the potential risks associated with it. This analysis will include a three-month stakeholder consultation, as well as a twelve-month monitoring and evaluation of outbound investments at national level, which will contribute to the joint risk assessment report. Based on the outcome of the risk assessment, the Commission will determine together with the Member States whether and what policy response is appropriate.

    More effective control of exports of dual-use items from the EU

    Today's increasingly difficult geopolitical context calls for action at EU level to better harmonize export controls for items for both civilian and defense uses — such as advanced electronics, toxins, nuclear or missile technology — so that not be used to undermine security and human rights. Today's white paper on export controls proposes both short- and medium-term actions, in full respect of existing rules at EU and multilateral level. The Commission proposes to introduce uniform controls at EU level for items not approved by multilateral export control regimes due to the involvement of some members. In this way, a patchwork of national approaches will be avoided.

    The white paper also foresees a high-level forum for political coordination and announces a Commission recommendation in the summer of 2024 for better coordination of national checklists before the planned adoption of national checks. Evaluation of EU dual-use regulation accelerated to 2025.

    Options to support research and development in dual-use technologies

    With the White Paper on options for greater support for research and development (R&D) in the field of dual-use technologies, the Commission is launching a public consultation. The White Paper, announced by President von der Leyenin November 2023, it contributes to the implementation of the priority for 'push forward' set by the strategy to strengthen European economic security, aiming to maintain a competitive advantage in critical and emerging technologies that can be used for both civilian and defense purposes.

    The white paper examines the current relevant EU funding programs in the face of existing and emerging geopolitical challenges and assesses whether this support is sufficient for dual-use technologies. It then outlines three options for the way forward: (1) continue on the path based on the current structure, (2) remove the exclusive focus on civilian applications in selected parts of the program that will succeed Horizon Europe, and (3) creation of a special medium that places particular emphasis on R&D with the possibility of dual use. Public authorities, civil society, industry and academia can have their say in an open public consultation until 30 April 2024 and influence the Commission's next steps.

    Strengthening of research security across the EU

    In today's complex geopolitical context, openness and borderless cooperation in research and innovation can be exploited and become vulnerabilities. The results of international cooperation in the field of research and innovation can be used for military purposes in third countries or in violation of fundamental values. Institutions of higher education and research institutions can fall victim to malicious influence from authoritarian states.

    In this context, the Commission proposes a Council Recommendation to provide greater clarity, guidance and support to Member States and to the research and innovation sector in general. Action at EU level is needed to ensure consistent implementation across Europe and avoid a patchwork of measures. By joining forces at all levels and across the Union, we can mitigate risks to research security and ensure that international cooperation in research and innovation is both open and secure. Regarding international cooperation in the field of research, the overall approach follows the principle of “open as much as possible, closed as much as necessary”.

    History

    < p>On 20 June 2023 the European Commission and the High Representative published a joint communication on a strategy to strengthen European economic security in order to minimize risks in the context of heightened geopolitical tensions and accelerating technological change, while maintaining high levels of economic openness and dynamism. The strategy provides a framework for assessing and addressing — in a proportionate, precise and targeted way — risks to the EU's economic security, while ensuring that the EU remains one of the most open and attractive destinations for business and investment.

    The strategy identified four categories of riskwhich need to be addressed as a priority: supply chains; physical and cyber security of critical infrastructure; technology security and technology leakage; financial dependency instrumentalization or financial coercion.

    To address these risks, the strategy is structured around three pillars:

    • Promoting EU competitiveness and growth, strengthening the single market, supporting a strong and resilient economy, and strengthening the EU's science, technology and industrial bases.
    • Protecting the EU's economic security through a range of policies and tools, including targeted new instruments where needed.
    • Partnering and further strengthening cooperation at the global level with countries that share our concerns and with countries with which we share economic security interests.

    < p>For more information

    Communication: promoting European financial security: introduction to the five new initiatives

    Source: 24h.com.cy

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