The European Union unveiled a plan on Tuesday to safeguard the economy of the union from risks posed by unreliable suppliers in nations that do not uphold its ideals, such as China, after the conflict in the Ukraine exposed Europe’s reliance on Russia for oil and gas.
The EU’s executive body, the European Commission, is working to create regulations to safeguard commerce and investments, notably in the digital and communication sectors, which adversaries might try to use for security or military objectives.
Ursula von der Leyen, president of the EU commission, made the announcement of the idea, which needs to be approved by members of the union. She said: “The globe has become more contested and geopolitical, and there is a restricted collection of important technologies that can be exploited in a different and aggressive way.
“Given the changing nature of the risks, we now need a strategic vision for how we are going to handle these risks.”
Von der Leyen added that the EU needed to be “more assertive” in using its existing tools to tackle the problem and develop new ones.
‘Country agnostic’
The plans are being promoted as “country agnostic” because no target nations are mentioned by name, but they dovetail with the commission’s new drive to “de-risk” its relations with China without completely “decoupling”, given it relies on the Asian giant to tackle global challenges such as climate change.
Von der Leyen said the capital, expertise and research of European companies must not be “abused by countries of concern for military applications”. She raised, in particular, concerns about the security of 5G and 6G telecoms networks.
The commission considers Chinese firms Huawei and ZTE to be high-risk suppliers. In recent days it endorsed moves by some of the 27 EU member countries to exclude the two companies from their 5G networks.
In the 2019 EU-China Strategic Outlook, Brussels for the first time called Beijing a “systemic rival.” Since then, things have gone downhill with both sides hitting each other with sanctions following increasing European criticism over China’s human rights situation, resulting in the EU cancelling a major investment deal in early 2021.
The aim of the new plan is to make European economies and supply chains more resilient to threats and to resist energy or inflation hikes produced by the war while keeping trade flowing.
Under the scheme, the EU would work with countries that share its economic security concerns.
“We cannot treat a supply dependency on a systemic rival the same as we would treat that dependency on an ally,” commission executive vice-president Margrethe Vestager said.
Other risks to be countered include those posed to cyber-security or to critical infrastructure such as pipelines, undersea cables, power generators and transport networks. The threats posed by countries using trade or investment to change EU policies would also be addressed.
The challenge will be to unite EU member states – each of which have their own national policies toward countries like China and Russia – around the plans.
EU leaders are expected to discuss the scheme at their June 29-30 summit in Brussels.