Reed Smith In-depth

Key takeaways

  • The EU’s new Economic Security Strategy (adopted in June 2023) aims at minimising the risks to the EU’s economic security in the context of increased geopolitical tensions and accelerated technological shifts. As part of the roll-out of this strategy, the European Commission adopted a comprehensive trade, investment and research package (the Economic Security Package) on 24 January 2024.
  • The Economic Security Package details the EU’s plans to

i. strengthen the control of foreign investments into the EU (through a revised EU Foreign Direct Investment Screening Regulation);

ii. monitor and assess the risks related to investments made by EU companies in advanced technologies in third countries (outbound investments);

iii. increase the effectiveness of the EU’s control of dual-use goods exports;

iv. improve support for R&D in technologies with dual-use potential; and

v. enhance European research security.

  • In this alert, members of our Brussels trade and competition team provide an overview of the Economic Security Package. 

Background: the European Economic Security Strategy

In June 2023, the European Commission and the High Representative published a Joint Communication on a European Economic Security Strategy to minimise the risks in the context of increased geopolitical tensions and accelerated technological shifts.

The strategy identifies risks to EU economic security in four areas, namely

  • the resilience of supply chains, including energy security;
  • physical security and cybersecurity of critical infrastructure;
  • technology security and technology leakage; and
  • weaponisation of economic dependencies or economic coercion

The strategy outlines the EU’s three-pronged approach to mitigating these risks by:

  • Promoting the EU’s competitiveness and growth, strengthening the Single Market, supporting a strong and resilient economy, and strengthening the EU’s scientific, technological 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 with countries worldwide that share the EU’s concerns and those with which it has common economic security interests.