EU Commission Proposal For A New European Economic Security Framework

What a difference five years make. In 2019, the European Union (EU) created a modest common framework for foreign direct investment (FDI) screening, Regulation 2019/452 (the FDI Regulation), stressing that decisions on proposed investments, and even the decision whether to engage in FDI screening at all, remained with EU Member States. A pandemic and two wars later, the EU seems poised to take a major step towards a more centralized approach to economic security policy.

In January 2024, the European Commission (EC) adopted a communication on advancing European economic security, outlining five initiatives to create a framework for continuous strategic coordination between the EC and EU Member States on the risks that Europe faces and the actions required to tackle them. The package includes a proposal for a new FDI screening regulation (the Proposal) to strengthen and further harmonize FDI screening in the EU. The other initiatives are set out in white papers on