“Europe was not designed to face competition from great powers, it must react”


IIt is a vague concept, but in the major capitals of the world, we do not fail to talk about economic security. Until recently, almost no one cared because most countries followed the rules of the multilateral liberal order, embraced globalization and even believed that economic interdependence would guarantee lasting peace and good relations between West, Russia and China.

However, in a time of geopolitical risks, war in Europe, growing antagonism between Washington and Beijing, pandemics and climate change, governments around the world are struggling to define new strategies to strengthen their security national. And economic security appears to be one of the essential aspects.

The task is difficult for everyone, but it is even more difficult for a European Union (EU) which, in addition to not being a political union, was not designed to face competition from great powers or the use of economic interdependence as a weapon of war. The EU must react. Although certain initiatives have been put on the table, there is no agreement on the objectives, means and priorities of economic security. Two positions can be distinguished.

The first considers that geopolitical tensions can be managed as they arise and underlines the need to preserve openness and multilateral rules. On the other hand, some argue that the EU must adapt to the new geopolitical reality by prioritizing industrial policies, subsidies, the protection of strategic sectors and reducing trade with countries that are not not considered “like-minded.”

For an integrated European defense market

Both of these views are erroneous. The first underestimates the possibility and costs of a major geopolitical confrontation. But those advocating radical change are naive about the feasibility of restructuring supply chains: subsidies cannot alter comparative advantage in the long term, and the cost of doing so could become prohibitive. The costs of fragmenting the global economy into competing blocs are estimated at 7% of global gross domestic product by the International Monetary Fund. Such a scenario would hit Europe hard. It is therefore necessary to provide a more precise response, which should focus on four areas.

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