Geopolitics meets business interests: the EU and European economic security

Abstract

In recent years, the European Union (EU) has introduced several measures intended to safeguard European economic security. We argue that variation in the distributional effects of these measures explains why some of them receive more support from business actors and others less. In turn, the balance of business support and opposition affects how much controversy we see about these policies and how easily they get adopted. We test our argument using three cases: the revision of the EU regulation on foreign direct investment screening, the introduction of outbound investment screening, and subsidies for the semiconductor industry. Using evidence from interviews, European Commission consultations, and other sources, we find support for our argument. We conclude that business actors heavily shape how the EU reacts to geopolitical challenges and suggest that this matters for the effectiveness of the EU’s economic security policy. This emphasis on the role of business interests contributes to research on geoeconomics and EU external relations.