Let European economic security become a reality

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Let European economic security become a reality

Introduction to France and Italy

Against the backdrop of profound changes in the global political and economic landscape, Europe is facing unprecedented economic security challenges. From the focus on Chinese investment in key technology companies, to the impact of the pandemic on supply chains, to the exposure of energy dependence risks, this series of events marks a major shift in Europe's perception of economic security. To address these challenges, the EU and its member states need to strengthen their control over key technologies and data, drive innovation and technological development, and build mutually beneficial relationships with international partners. However, they are internally divided and influenced by factors such as their relationship with major economies. As a result, a flexible and forward-looking economic security strategy is essential. François Godement, special adviser to the Institut Montaigne for Asia and the Americas, recently released a think tank report entitled "Making European Economic Security a Reality", which sets out a comprehensive economic security strategy for Europe to effectively respond to these increasingly complex challenges and ensure that Europe remains competitive and influential on the international stage.

Against the backdrop of profound changes in the global political and economic landscape, Europe is facing unprecedented economic security challenges. Today, economic security has moved far beyond the traditional scope to focus not only on the consequences of natural disasters and the protection of free trade, but also on a wide range of areas, such as the maintenance of national defense and national security, the assurance of competitiveness, and the protection of sectors in distress. In the face of these challenges, the EU and its member states need to act on the three fronts of protection, promotion and cooperation, including strengthening control over key technologies and data, promoting innovation and technological development, and building mutually beneficial relationships with international partners.

In practice, however, the EU faces a number of challenges, such as differences among member states on balancing national security and economic openness, as well as disagreements on the choice of measures and how to finance them. In addition, relations with major economies also influence the EU's economic security strategy. Therefore, the EU's economic security strategy must be flexible and forward-looking, and improve the overall level of economic security and create a more stable and conducive environment for citizens and businesses by strengthening internal coordination, deepening international cooperation, and adjusting policies and measures in a timely manner. In the future, this strategy will need to constantly adapt to global changes to ensure Europe's competitiveness and influence on the international stage. Against this backdrop, the bill proposed by the Montaigne Institute is particularly important in order to develop a comprehensive economic security strategy for Europe to effectively address these increasingly complex challenges.

01 Protect, promote, and cooperate

When it comes to ensuring economic security, we have to make a trade-off between avoiding inaction and preventing excessive intervention. The European Union, hit by an imminent threat, has embarked on a longer-term response. Europe has been slower in decision-making than our allies. The United States benefits from its federal structure and budgetary arrangements, as well as the privilege of the dollar as the global reserve currency. In recent years, Japan has gradually moved away from its guiding economic system, but its strong economic department, the Ministry of Economy, Trade and Industry, has maintained a tradition of working directly with companies.

The EU has always been a staunch defender of multilateral rules and firmly believes that any challenge to them should be based on the overarching objective of preserving competitive and free markets. However, it has been relatively slow to act, sticking to the principle of proportionality in defensive operations and expressing concerns about subsidy warfare. This is not just a principle, but more applicable to an economy that has maintained external trade and current account surpluses for a long time. While the idea of upholding multilateralism has not changed, the introduction of economic security measures has been a revolution for the EU, as previous successes have been based on openness both inside and outside.

At the same time, the EU is actively developing a new agenda while adopting defensive or passive protective measures, with industrial policy and supply chain control at the core. This marks the second major change. While industrial policy focuses on the EU Chips Act and a number of important projects of common interest, it still needs to rely on supportive tools such as education and the integration of financial resources. However, these measures compete with other priorities in the EU and member state budgets, such as agricultural subsidies, structural funds for Eastern European member states, the costs of the energy transition, an increase in the defense budget, and economic and military aid to Ukraine.

In addition, although Europe still maintains a leading position in certain industries such as civil aircraft and chemical industry, it is suppressed by the United States in the areas of defense, software and digital, and is inferior to China in the core areas of hardware digital industry and energy transition. The role of industrial policy in economic security is controversial. Securing your supply chain is key, but maintaining a competitive edge through innovation is a broader market issue. And "other countries are doing the same" is at the heart of economic security.

In fact, the concept of "integrated security" was proposed by Japan as early as 1980. Due to the limitations of the post-war constitution, Japan was constrained in hard power. Similarly, the EU's limited mandate in the areas of foreign policy and hard security requires the use of non-traditional means, such as technology, economics, and regulation, to ensure its combined strength.

This has prompted the EU to work on the third aspect of its pursuit of economic security: relations with "partners". It insists on "open" strategic autonomy as the cornerstone of economic security, not solely out of values, but in recognition that innovation flows and interdependence with other producers are an effective way to increase productivity and open up new frontiers without incurring the high costs of self-sufficiency. The question, however, is whether this strategy of openness based on diversification can be sustained within the limited confines of the global economy.

02 De-risking: Status quo

Recently, Europe, including the Biden administration, has explicitly rejected the idea of decoupling from China, and has instead favored risk-reducing strategies to safeguard national security and public order. However, the specific definition of risk reduction remains vague, especially in relation to dual-use products, technology leadership, ethical sourcing and sustainability. There is a view that although the Biden administration in the United States is negotiating on both sides of the Atlantic, it lacks a clear trade policy and is actually implementing a kind of "unilateral protectionism", and the Republican administration may take a tougher attitude if it takes office.

The boundaries of risk mitigation are difficult to define clearly, especially when considering the vulnerabilities of supply chains. The complexity and length of the supply chain make it difficult to mitigate risk, as revealed by the attack on Tesla's Gigafactory in Berlin and the difficulty of Japanese companies in assessing the resilience of their own supply chains. Although studies have shown that major industrial countries have achieved some degree of self-sufficiency, their dependence on China as a key supplier remains significant. However, these studies often ignore the interdependence between suppliers and the flexibility of trade.

To ensure value chain security, some policies aim to weed out unreliable Tier 1 suppliers, but often result in longer supply chains involving more Tier 2 suppliers located in third countries. Overall, global risk reduction efforts are still being explored, and more understanding and coordinated action are needed to respond to the complex and changing international environment.

03 The EU's path to economic security: a step-by-step evolutionary strategy

Initially, the EU responded to a single issue, but concerns about China's trade imbalance gradually mounted. Subsequently, the EU began to seek more systematic measures for economic security. Despite the initial setbacks and lengthy internal discussions, this direction has not only been maintained, but has been accelerated, thanks to successive impetus from the Juncker and von der Leyen committees.

Today, the EU has entered the second generation of tools that cover internal investment reviews, dual-use provisions, and the General Data Protection Regulation (GDPR), an important part of digital security. In 2013, the EU made its first attempt to introduce an internal investment review, but it failed. The EU subsequently amended its anti-dumping rules, not specifically targeting a particular country, but adding additional protections.

Unlike the United States, the EU adheres to the principle of proportionality to the degree of damage in its sanctions. Driven by countries such as France, Germany and Italy, the EU passed an internal investment review in 2019 and implemented it in 2020. The Commission has issued three detailed reports, with the third report in 2023 assessing the internal investment review and dual-use export control provisions. This reflects the Committee's growing desire to achieve coordinated development in all aspects of economic security, and its reports are more detailed than ever before.

However, it is important to note that the 2023 report does not describe the origin of foreign investment affected by the Committee's review opinion. This lack of information may be an aspect that needs to be taken into account in the future when the EU improves its economic security strategy.

The European Commission's third foreign direct investment (FDI) review report for 2023 reveals the following key messages:

In terms of investment, information technology, manufacturing and retail are the main sectors that attract foreign direct investment in Europe.

In terms of investment sources, the United States is the most vetted country, while China leads in state-owned entity participation and is increasingly shifting its investment approach to greenfield rather than M&A.

In terms of review, 55 per cent of the 21 Member States that have implemented a review system have submitted cases for authorization. Of these, 1% were denied, 4% were withdrawn, and 9% were authorized under restricted conditions.

In terms of Member State motivation, six countries submitted nearly ninety percent of the review cases in 2022, with a huge difference in amounts. For States that do not have a review regime, the Committee has only commented on a few cases.

In terms of dual-use export controls, China has the largest number of applications, involving a whopping 45.5 billion euros, but the rejection rate is low.

In terms of recent regulatory pushes, a number of regulations have been introduced in Europe, such as the Anti-Coercion Tool (ACI) with a clear timetable to curb economic coercion, the Critical Raw Materials Act (CRM) focusing on raw material procurement in the green and energy transition, and the Digital Services Act (DSA) and the Digital Markets Act (DMA) working to create a safer digital environment. However, please note that this information and data is current as of 2021 and is not current.

At the same time, the EU has taken a number of strong measures to strengthen cybersecurity and effectively respond to potential threats, including:

In 2019, the EU Cybersecurity Act laid a solid foundation for cybersecurity legislation, which not only improved cooperation and coordination between member states, but also ensured the robust security of the cyber infrastructure.

In April 2023, the European Commission proposed further amendments to promote a European certification scheme to ensure that future security service providers are strictly compliant with EU cybersecurity standards to provide users with more reliable services.

In addition, the European Commission has actively introduced the EU Cyber Solidarity Act to comprehensively strengthen the preparedness, detection and response capabilities of cybersecurity incidents, further promoting close cooperation between member states.

It is worth mentioning that the EU has also passed the Cyber Resilience Act, which aims to make cyber infrastructure more resilient against cyber threats. Manufacturers will have a full 36 months to fully comply with their legal obligations to ensure cybersecurity.

In January 2023, the EU officially implemented the Directive on measures to ensure a highly consistent level of cybersecurity across the EU (NIS2 Directive), which explicitly requires member states to incorporate it into domestic law within 21 months, aiming to ensure a highly consistent level of cybersecurity across the EU.

In the area of public procurement, the EU has also spared no effort in carrying out reforms. In 2014, the EU revised the Public Procurement Directive, followed by the fourth revised Public Procurement Action Plan in 2020, which aims to further optimize public procurement practices, ensure fair competition, and serve as an important strategic tool to advance key policy objectives.

However, while the EU has made significant progress in a number of areas, the advancement of the Corporate Sustainability Due Diligence Directive (CSDDD) has encountered setbacks. The directive has now been shelved and is increasingly unlikely to be adopted.

The European Commission's 2023 report on economic security reflects the importance of geopolitics and marks a major shift in European perception. Von der Leyen's speech provided the geopolitical context for this new initiative.

Despite criticism that the European Commission is too much in sync with the US, the June 2023 economic security overview reveals a clear geopolitical orientation. The EU's comments not only focus on economic security, but also introduce regulations that ensure European competitiveness, heralding greater changes in industrial policy. The world is vying for dominance in the industries of the future, including the energy transition, digital innovation, and biotechnology. However, the definition of economic security is relatively narrow and does not cover factors such as climate change and the pandemic.

The "promote" aspect of economic security exacerbates the antagonism between marketists and advocates of government intervention in key economic sectors. The U.S. policy shift calls on Europe to abandon some of its market competition policies and move toward re-industrialization, re-domestication, and large-scale investment support. At the same time, China's success in key industries of the future has also brought competitive pressures.

Despite U.S. subsidies and the temptation to emulate China, the EU lacks the U.S. economic resources and currency-printing capacity, and is not the same as China's national capacity. Industrial policy and economic security intersect in terms of the production capacity and supply chain integrity of specific technologies, but in the context of globalized production, ensuring supply chain integrity is a difficult task.

04 Obstacles to Europe's Approach: Concerns of Member States and Businesses

Due to institutional and political differences, it is still difficult for the EU to make breakthroughs in some areas. While the European Commission has steered its policy direction amid geopolitical shifts, large member states remain skeptical about power-sharing and new regulations. Thrifty member states fear resources being taken over by the EU, while heavily indebted countries contribute limited to new projects. Hungary and other countries are opposed to the new economic security measures.

With parliamentary elections approaching, the European Commission is paving the way for a successor. Some of the projects it has promoted, such as monitoring investments and tightening security controls, have provoked resentment from major powers. Such an alliance is complex and involves Nordic countries, companies investing in China and countries that value autonomy. As a result, there are constant voices opposing the expansion of the Commission's powers.

In addition, there are contradictions within the same country. For example, although the semiconductor export agreement reached between the Netherlands and China is in line with the rules, ASML is facing export restrictions after a surge in sales. This reflects the dilemma of businesses: reluctance to accept export restrictions, fear of lost profits and competitors overtaking. This is an economic challenge for companies that rely on exports and investment in China.

The corporate boycott had a significant impact on the German public statement, with the Federation of German Industries (BDI) taking a negative view of the June 2023 communication strategy, believing that the strategy was too defensive and the cost and trade flow direction were not clear. German industry is more inclined to take a proactive approach, fearing a European backsliding on free trade agreements. While Italy supports defensive measures, the Italian Chamber of Commerce and Industry and BusinessEurope have reservations.

There are divisions within Germany and at the federal level, with Chancellor Scholz emphasizing that companies are self-determined and that the government is willing to engage in dialogue with companies. Foreign Minister Baerbock noted that companies that rely on the Chinese market will take on more financial risks.

France has expanded the scope of economic security on issues such as electric vehicles and subsidies, but has been reluctant to hand over decision-making power to the committee, placing more emphasis on the control of the council. While France advocates strategic autonomy and European sovereignty, it is hesitant to delegate power, influencing views on export controls and foreign investment screening.

The French attitude is linked to the Trade and Technology Council (TTC), which was created jointly by the European Commission and the United States. The position of the European Commission on China is close to that of the United States, and with the exception of France, other countries generally refuse to "align with the United States", fearing to become vassals. Fears of U.S. export restrictions hitting foreign businesses, but easing for U.S. businesses. The failure of the EU and France to come up with risk assessments to make autonomous decisions undermines overall economic security.

The EU has not aligned itself with the United States, as the United States has rarely consulted with China in advance at TTC-related meetings. Economic security remains an issue that Europe needs to address together. This underscores the need for decentralization within the European Commission, with the Directorate-General's Offices responsible for different areas, and the responsibility of Member States to increase coordination between national administrative agencies and cooperation with actors at the EU level. Sensitive issues need to be consulted with Member States at a higher political level.

January 2024 Economic Security Plan: A pragmatic and prudent new approach

In the face of many reservations and the political changes brought about by the election, the Commission's recommendations in January 2024 are more pragmatic and steady, and different from previous ambitious goals. The deadline for monitoring key technologies has been reasonably extended and has provided space for public consultation and negotiations among Member States.

Plans include revising inbound investment screening regulations, strengthening research security, and publishing a white paper on outbound investment risks, export control reform, and technology R&D support. These initiatives are aimed at controlling technology transfer and are limited in scope, but demonstrate a prudent approach to risk reduction.

Observers see the move as a realignment of the previous economic security strategy and does not include some ambitious goals. The current proposal is more focused on protecting technology and research security, strengthening the national security of member states, and increasing the EU's influence in the international economic security debate. A public consultation is currently open to Member States.

05 The way forward: policy options, means and partners

The EU and its member states face important choices when it comes to defending their economies and security, but estimates of the costs are inadequate. When balancing defensive and offensive policies, it is necessary to consider industrial policy, supply chain resilience, and increased traditional defense spending, as well as the potential consumer burden of tariffs on economic security and environmental policies.

Regulation can have unintended consequences, especially in the field of AI development. Innovation requires risk and experimentation, but adjudication should strike a balance between private innovators and public regulators.

Food security is another important issue that, despite being taken seriously in China, is less discussed in the EU. The contradiction between free trade and agricultural protection makes it difficult to choose, and environmental norms and food security need to be balanced through subsidies.

Voters reacted negatively to the additional costs of energy transition and economic security policies, and needed to demonstrate policy returns and ensure equitable cost-sharing. Some economic security policies, such as reshoring of production and the CBAM, can be mutually reinforcing, but innovation needs to find a balance between local R&D and global resources.

Although the European single market is designed to be efficient, some industries still rely on international market sizes. Long-term investment and the strengthening of member states are needed to increase the capacity for scale. At the same time, it remains open to external investors, has access to financial and technical resources, and achieves mutually beneficial research collaborations.

In summary, the EU needs to choose wisely, effectively and with the right partners to balance policies, promote innovation and economic development, and ensure global competitiveness, including:

First, we need to find ways to generate financing for Europe. Economic security experts point out that it is difficult to ensure economic leadership through defensive measures alone, and industrial policy support and innovation are crucial. However, the implementation of major industrial policies takes a long time and is costly, for example, Europe relies on imports for key materials, and most battery factories are dominated by China.

Critical projects such as batteries and semiconductors require huge investment, and the EU's chip program, although supported by the budget, relies mainly on private investment. European investments pale in comparison to global IT giants. The United States and China are heavily involved in the semiconductor industry, and Japan is also actively participating in providing financial support through institutional cooperation.

Europe has been surprised by the expansion of South Korea's defense industry capacity, and its huge investment in a chip manufacturing center underscores the importance of economic security projects. But it is difficult to achieve these plans with European fiscal means alone.

Relaxing the rules on state aid is not a long-term solution, and it is necessary to invest precisely and attract external investors. Open cooperation is the key to "strategic autonomy", and in global competition, those who can integrate internal and external resources will win.

Second, the integration of resources and human resources. At the EU level and in member states, human resources and budgets are essential for defensive measures. Although not as large as the United States, the demand for technical, financial, and language skills is still significant. The U.S. Department of Commerce has a large number of employees, while the European Commission and the Directorate-General for Trade have a relatively small number of employees. The budget of BIS, a key institution for U.S. economic security, has grown, but it is still considered insufficient to meet the needs of its mandate. BIS relies on inter-agency cooperation and intelligence resources, which the EU and its member states do not have.

However, there is a gap in the ability of the United States to analyze foreign investment and assess the impact of export restrictions or sanctions. MEPs generally agree that the Council of Europe and the Directorate-General for Trade lack human resources. Due to the sensitive issues involved, the Committee had avoided mentioning resource requirements in the proposals, which could lead to further delays in the implementation of the new proposals. Therefore, strengthening inter-agency cooperation and improving the level of human resources are important challenges for the EU in the field of economic security.

Third, partners on both sides of the Atlantic. To ensure the implementation of technological security and economic rules, the EU and its member states need to strengthen coordination and resource integration with private companies, and deepen cooperation with the United States and like-minded countries. Japan, South Korea and Australia are important partners, but uncertainties remain in places such as Central Asia, Turkey, Southeast Asia and Singapore. In the context of sanctions, third-party trade evasion is frequent, which exacerbates economic security challenges. Therefore, strengthening cooperation with the United States, deepening internal coordination, and paying attention to regional influences are important tasks that Europe urgently needs to solve in the field of economic security. However, if the United States adopts mercantilist policies, Europe's economic options will be limited, and defense spending will rise, making strategies to avoid global economic fragmentation particularly complicated.

Fourth, the partnership with Japan. Although the EU does not place special emphasis on cooperation with Japan, the two sides have actually established close cooperation. Japan faces similar economic security challenges to the EU, but it has not adopted a self-sufficiency strategy.

Japan's industrial development has transformed from a full-service industry to a highly international one, while maintaining the tradition of public-private partnerships. In terms of economic security legislation, Japan is ahead of Europe and the United States, adopting a series of comprehensive and whole-of-government strategic measures, and passing the Economic Security Protection Act. In addition, Japan also attaches great importance to personnel safety in the field of research.

These measures have been widely supported by public opinion in Japan, and most Japanese people have a negative view of China. At the same time, the industrial tradition of working with the government was revived, and key businesses trusted the government. However, there are challenges to replicating these features in the European Union.

Japan and the EU work together within the G7 to resist economic coercion. The EU has recognized Japan's influence in key technical information and international negotiations, and has signed a cooperation agreement with it. In the event of adverse changes in US trade policy, close cooperation between the EU and Japan will play a key role.

Fifth, work with the private sector. To ensure economic security, cooperation with the private sector is essential. The private sector holds key information, but the EU lags behind in this area because of its adherence to the principle of market neutrality. The new Industry Forum, while making a difference, is only a platform for high-level discussions.

While the expansion of the public consultation mechanism was emphasized, it did not meet the need for confidentiality in information sharing. There are precedents in the European Union whereby companies can complain to the Commission in dumping cases without having to make them public. However, issues involving proprietary information and trade secrets require more secure mechanisms to ensure information security. Safeguards have been put in place by DG TRADE's steering bodies, but it is not easy to coordinate the introduction of these measures by member countries and their administrations.

As the implementation moves from risk analysis to preventive measures, contradictions and difficult choices will emerge among Member States. Large member states may think that their security mechanisms are adequate, but they are still inadequate across Europe, as security vulnerabilities often occur in the weakest links.

06 Choose a practical course of action

Europe is not alone in the face of economic security challenges, but other countries have their own strengths. The United States is energy self-sufficient, thanks to its status as a global currency, while China has an advantage in global competition with its vast coal resources and long-term planning. Japan and South Korea, while adhering to top-down innovation and industrial policies, are closer to Europe in terms of scale and resources. Security and economic policies are closely linked, risks are multiplied, and defensive and offensive policies are intertwined. Implementing economic security is a numbers game, requiring budgetary and human resources, and information on this is rarely mentioned at the EU or national level, so the report recommends:

First, on institutional reform. At the operational level, the EU should integrate information and case studies to provide a convenient mechanism for decision-making. Although the EU is non-federal, it is still necessary for Member States to cooperate with public administrations in collecting information. Progress could be made on norms and standards, such as the identification of risks and the harmonization of statistical information and classification criteria. However, this is only a preliminary manifestation of shared responsibility. In difficult cases such as export controls, the Committee has proposed a mechanism for political consultation to Member States.

Institutional reform is imperative to establish institutional setups for sharing confidential information and conducting joint assessments, regardless of the level of decision-making. Informal communication between public administrations and companies needs to be escalated to the sharing of technology and trade secrets. Japan is enacting legislation on a security review system to ensure credible communication between government and business. Although there is an idea of an economic security commissioner in Europe, the competition is fierce and the possibilities are limited. Therefore, consideration could be given to the establishment of a formal cooperation body among the Directors General. Drawing on the models of the U.S. Bureau of Industry and Security, the National Security Council, and Japan's New Bureau of Economic Security, Europe could create a one-stop-shop for services, but it would need to address coordination issues with member states. Proposals include the establishment of a European Committee on Economic Security or a Committee on Technical Risk Assessment.

Institutional set-ups need to take into account staffing, distribution of powers, and confidentiality. Regardless of the organization, there should be a centralized component for risk assessment and decision preparation, with information from the Director General, Member States and intelligence sources. At the same time, structures and processes need to be established to attract private sector partnerships, including regular consultations with industry organizations, and incentives for companies to actively participate in the trade-offs between risk and return. While companies may face a mismatch between short-term business interests and long-term public needs, they are often the primary victims of economic security violations, and should gradually recognize the importance of cooperation. The choice of action should take into account the roles and needs of the EU, Member States and private companies to ensure the effectiveness of decisions and the feasibility of implementation.

Second, defensive policy. The complex delineation of economic security boundaries is particularly challenging for European entities. Defense innovation and industry depend on multiple factors, and economic security extends to competition and innovation.

In the case of limited resources, the means need to match the objectives. Europe's divergence of competence between the Committee and Member States had led to an under-resourced proposal. Defensive economic security requires financial support, as opposed to an active industrial policy.

Defensive options are indispensable when emphasizing industrial policy and economic sovereignty. Priority should be given and cooperation should be made with external partners. Industrial policies are slow to produce results, while defensive policies are less costly and quick to produce results. Politically, however, the distribution of authority and external priorities remain key considerations.

In addition, cost is the main criterion for developing policies. In the face of competitive pressure and the challenge of "Chinese prices", it is necessary to explore innovative means such as the carbon border adjustment mechanism to promote fair competition. Japan's approach to sustainable development is worth learning, but it needs to weigh the pros and cons to ensure a balance between sustainability and the global market.

Third, offensive policy. Proactive economic security policies need to balance risks with costs. Industrial policies involving large-scale innovative production need to be financed to compete with other targets. The costs of sustainable agriculture, emission reductions and greening are emerging.

The state is re-involved in economic development, but it is doubtful that the state has ever contracted in Europe, such as France, which is a major public spender. China's industrial policy is successful and dependent on global exports. But are we willing to tighten in other areas of spending to match its planned economy?

Prioritizing economic security is a difficult choice. The EU relies on the power of words, with new priorities emerging and de-priorities rarely discussed. Risk reduction initiatives need to be questioned and weighed against other priorities. The consistency between greening and economic security is not obvious, unless green innovation reduces dependence. Large-scale green technologies rely heavily on China.

Economic security also competes with the cost of increasing defense capabilities. The defense and weapons sector relies on new technologies in the civilian sector. The Russia-Ukraine conflict has shown that the mass production of conventional weapons is a priority. Europe's socio-political dependence on welfare state support makes it more difficult to finance innovation policies.

Fourth, a guide to geopolitical security: strategies to achieve realistic goals. In the face of real-world challenges, we must make difficult choices. In the area of economic security, overextension is an obstacle to efficiency, so proper sequencing and scheduling are essential.

Working with like-minded partners to investigate and defend against risks is key to maximizing cost-effectiveness. This requires us to remain open and promote technology and industrial transfer, from low-cost producers to emerging economies and resource-rich developing countries.

At the same time, considering the demographics of Europe, the migration of high-level and skilled workers is also a concern.

We must define clear boundaries so that European rules only benefit competitors. Promoting these rules globally and creating extraterritorial influence is key to ensuring success. Otherwise, even if there is an achievement, it will be full of challenges and will require continuous persuasion and hard work.

Getting rid of the monopoly of resources and production is the goal, but the means to achieve it are limited. Experiments need to be carried out, bearing in mind the benefits of openness. Financing support for less developed partners, such as the World Bank and Japan's RISE initiative, is a viable path.

Commodities can be turned into weapons, and companies need to be wary of the risk of technological sanctions and supply deprivation. Geopolitical security should be our guide, ensuring freedom of choice for the future. This is not only the right of the democratic individual, but also a prerequisite for society and the state.

Rumors of the end of globalization or decoupling from China are exaggerated. Pursuing other goals while countering China risks can lead to economic isolation and stalemate. We should restore influence in external economic and technological relations, prioritizing economic security policies and deprioritizing other policies that impede security.

The Commission's task is to move forward incrementally, not to talk about ambitions. Time is of the essence and we need to move forward in a European way, but we need to be aware that the challenges today are much greater than they were in the '50s.

·Translator Introduction ·

Liu Zhuoyan, Lun Ning: Master of Translation at the University of Chinese Academy of Social Sciences, currently a member of the compilation team of the French-Italian view of the world.

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