The geoeconomic rivalry is accelerating with the world’s major powers using economic instruments to advance strategic agendas. This poses a challenge to the EU and its member states. The EU’s market-oriented approach to international economic engagement exposes it to risks arising from the geoeconomic power politics of other major powers. These risks are especially acute in the technological domain where Europe’s competitiveness has been decreasing and its strategic dependencies on China and the United States growing. This report examines the risks and options for the EU and one of its member states – Finland – in adapting to the rise of geoeconomics. The report shows how the risk picture for European businesses are undergoing change, highlighting the need to incorporate geoeconomic dynamics into existing risk assessments. It also surveys emerging EU and Finnish policy instruments for managing strategic interdependencies and associated risks. The report gathers in-depth data on European and Finnish interdependencies with China and the United States, taking stock of critical strengths and vulnerabilities. Key policy recommendations following from this analysis focus on 1) introducing national geoeconomic risk assessments; 2) increasing strategic coordination of technological governance; 3) promoting trade cooperation; and 4) ensuring a level playing field for European companies.
Publications of the Government’s analysis, assessment and research activities 2022:12.