The European Union must learn to perform in a power-based global system to ensure its economic security. A shift from mere de-risking to strategic leverage is sorely needed. However, obstacles abound, Tobias Gehrke, policy fellow at the European Council on Foreign Relations told EU Perspectives.
The global economy is increasingly shaped by great-power competition and the strategic use of economic interdependence. In this context, the European Union’s approach to economic security, focused on risk management, is showing its limits. Tobias Gehrke of the ECFR think-tank spoke to EU Perspectives about managing them. How is the EU’s economic security strategy evolving? What are the political constraints on using existing instruments? What must the Union do to strengthen its credibility and capacity for action in an increasingly competitive geoeconomic environment?
How could the EU transform from a risk manager to a power broker?
The strategy, presented by European Commission in early December, is a follow-up to the 2023 European Economic Security Strategy. That was Europe’s way of saying: we are facing many risks in the global economy. Let’s make sense of what kinds of risks they are. These risks were categorised into four different buckets, which helped frame this new geoeconomic world. The idea was to identify the risks and then mitigate each of them with different tools. In 2023, the mindset was very much: identify the risks, mitigate them, and then move on to the next one. The EU approached economic security primarily as a risk mitigator. That was the intellectual foundation of the strategy.
Fast forward two years, to 2025, and this approach is no longer sufficient. The challenge is no longer about identifying a set of abstract risks. Other great powers are behaving very differently: they have abandoned large parts of rule-based behavior and are using economic transactions whether in energy, finance, trade, or investment in a highly transactional way. They are weaponising the economy much more aggressively to gain advantages. In this world, you cannot just be a risk manager. It is not enough to look at data and identify vulnerabilities. You have to think in power terms: what are Washington and Beijing trying to achieve? How do they think about power and security in the global economy? This requires a much more political mindset, rather than the technocratic mindset that has long dominated Brussels.
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The shift is from asking, ‘What are the specific risks, A, B, and C’ to asking ‘what does it mean to have influence, leverage, and deterrence in the global economy?’ That is the core challenge for Europe. The new economic security communication published two weeks ago moves in this direction. It acknowledges that the defining feature of the global economy we are entering is that great powers are behaving very differently not necessarily doing ‘bad’ things, but acting in a power-based way.
The communication tries to open Europe up to becoming more power-oriented. But this is extremely difficult for the EU, perhaps even impossible, we don’t yet know. Europe is bound by law, built on consensus, and rooted in a rules-based system. These are massive disadvantages in a power-based economic order. We were very good at the rules-based order, but we are now entering a power-based one. The task is to ask what it takes for Europe to operate in this new global economy without becoming like China or the US. We do not want to become like them, but we also cannot be naïve and believe we can stay the same. That is the difficult balancing act.
Some tools already exist, but the EU is at a loss over how to use them properly. In your opinion, what is missing and why?
We do have a lot of tools, arguably enough for now. The much bigger challenge is rallying everyone around clear priorities. What are the one, two, or three key things we need to achieve in the next 12 months? We haven’t really managed to agree on that. We recognise that there are many different risks and priorities, but we struggle to rank them. On top of that, many of the instruments we have operate in silos. Trade officials focus on trade, industrial policy officials focus on industrial policy, and there is limited coordination between them. Member states pursue their own approaches as well. Coherence and unity are therefore among the biggest challenges.
A second issue is that the previous strategy was very broad. It described global problems, but it did not translate them into an operational approach. We are now moving in the right direction. With the new economic security communication, the Commission also published the Resource EU communication on the same day. This is a much more action-oriented plan. It identifies a concrete priority: raw material dependency, especially rare earths, due to China’s export controls and the short-term threat to European industry. Also, it sets a clear timeframe—action within the next 12 months—and outlines what can be done under the three Ps of economic security: promote, protect, and partner.
It is not perfect, but it is moving in the right direction. The best way to improve economic security is to focus on one supply chain at a time and say: here is the problem, here is what we need to achieve in the next 12 or 36 months, and here are all the tools that can be mobilized. The Commission explains what it will do, what member states should do such as screening foreign investment or considering export controls and what the private sector should do. This still requires a lot of coordination, but it is a very different and more concrete approach. It is a cautiously positive step.
The next move should be to learn from this Resource EU action plan and replicate it for other priority supply chains: pharmaceuticals, where we face risky dependencies, or legacy semiconductors, as highlighted by the Nexperia case. In these areas, a disruption would pose a systemic threat, not just to one company but to the entire industrial base. In my view, this is the direction we need to go: one action plan after another, each focused on a concrete priority.
You said the Resource EU plan is a good sign, but not perfect. Why? What are the priorities mentioned?
First, it still depends heavily on support from member states, and implementation remains a major challenge. In several areas, the plan makes suggestions rather than firm commitments. For example, it proposes studying price floors, which could imply tariffs on raw materials, but stops short of saying they will be introduced. In other areas, it calls for more analysis, mapping, and assessment. This caution reflects the limits of the Commission’s authority: it cannot dictate everything, it must persuade member states, and it has limited budgetary resources. The plan allocates €3bn for 2026, which is quite concrete, but it may not be sufficient. Member states may need to contribute additional funding.
The plan also lacks a strong foreign policy dimension; it focuses mainly on what happens within Europe, rather than how these measures interact with external partners and geopolitical dynamics. So it is not a comprehensive menu of actions. That said, if the measures outlined can be implemented within the next 12 months, this would represent the most progress Europe has made so far. We can then assess what worked, what didn’t, and what was missing, and apply those lessons to future plans perhaps for pharmaceuticals, where dependencies on active ingredients from China and India are particularly risky.
More broadly, the 2023 economic security strategy focused heavily on high-tech areas such as advanced chips, quantum, and AI. That focus may have been too forward-looking. We also need to pay much more attention to threats to our existing industrial base: raw materials, legacy semiconductors, and other basic inputs. These are not glamorous or cutting-edge technologies, but they are essential. Without access to them, the economy would face a severe crisis. This is what we are learning from rare earth dependencies on China and from cases like Nexperia. The lesson is clear: basic inputs deserve much higher priority.
How could the EU face the US and China regarding economic security?
The EU needs a two-pronged strategy. Over the past two and a half years, we have focused almost exclusively on one prong: de-risking. The idea was to identify dependencies and reduce them. In practice, de-risking has largely failed so far. We have not significantly reduced our dependencies. We need to ask why this approach has not worked and how we can make de-risking more realistic.
But even if de-risking were suddenly successful, it would not be enough. We live in a world of constant coercion: economic coercion from China, technological and digital pressure from the US, and energy and military pressure from Russia. Even in a hypothetical scenario where de-risking accelerates, Europe would still be exposed. That is why we need a second prong: building leverage and deterrence. If others threaten us, we must be able to respond credibly.
Technically, we have tools for this, most notably the Anti-Coercion Instrument. If triggered, it would allow the EU to take powerful measures, including counter-sanctions, freezing investments, or restricting trade. The problem is not the absence of tools, but the absence of a strategy and political confidence to use them. Europe’s central task in the coming years is therefore to build economic deterrence and leverage. This requires understanding not only where we are dependent, but also where others depend on us and ensuring we do not lose those advantages.
It also means learning how to use these advantages politically. At the moment, no one dares to use these tools because the consequences are uncertain and there is fear of escalation, particularly with China. There is a widespread belief that Europe holds the weakest cards. Even if that were true, we still need to invest in building this capacity, because economic and technological coercion is already high and will only increase.
Europe may not be good at operating in this world, but we must at least get better at understanding it, shaping it, and deterring others.
How should the EU fix the credibility gap?
One of Europe’s biggest credibility problems is that it has powerful tools but rarely uses them. If you never demonstrate your willingness to act, others will understandably conclude that you are weak, divided, or lacking political will.
This is particularly visible in Washington and Beijing. The Trump administration has openly mocked Europe’s weakness, and China has been very effective at dividing Europeans and pressuring individual companies and countries. Addressing this requires a political mindset. Responding to coercion has costs, and Europeans are acutely aware of those costs for consumers, for industry, and for growth. But while Europeans tend to think primarily in economic terms, others think in geopolitical terms. Credibility, reputation, and resolve matter.
Europe needs to become more geopolitical in its thinking. Yes, actions have economic costs, and trade conflicts are risky. But we cannot approach these challenges as economists alone. We also need strategic judgment and big-picture thinking. That is where Europe is currently lacking and where it needs to improve.
