Escaping into Economic Security. How Can the European Union Use Foreign Direct Investment Screening in Times of Crises? Lessons from the United States
Escaping into Economic Security. How Can the European Union Use Foreign Direct Investment Screening in Times of Crises? Lessons from the United States

Summary/Abstract: The rapid transformation of the international economic order from a liberal arrangement of economic interdependencies to a geoeconomic competition betweenstates changed attitudes regarding foreign investment. This arguably protectionistturn toward national security is an attempt to safeguard against multidimensionalconsequences of crises. To protect the EU’s strategic autonomy, Regulation 2019/452came into force in 2019, laying the foundations for the European Foreign InvestmentScreening framework. Soon afterwards, FDI screening served as an instrument in theEU’s policy for addressing and mitigating risks rapidly arising from an internationalcrisis: the COVID-19 pandemic. This experience influenced another recent measure –the European Economic Security Strategy (EESS) – together with the proposal for theNew FDI Screening Regulation.This article argues that the experience of the COVID-19 crisis inspired dualisticchanges in FDI screening, transforming it into a protector of European economic security. The EESS and the proposal for the New FDI Screening Regulation are juxtaposedagainst the United States’s experience in controlling FDI for the aim of assessing FDIscreening as a tool for safeguarding European economic security in light of the EU’sinexperience in the matter.

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