Europe’s Geo-Economic Turn: How Global Competition Changed the EU’s External Action

The paper argues that the European Union can be increasingly understood as a geo-economic power. To some extent, this proposition is not surprising. As other scholars argued, the EU is in its essence characterized by its single market and translates its massive internal regulatory competences and market attractiveness into external power to shape or coerce outcomes in international affairs. However, recent years have seen a qualitative change. Up until the turn of this decade, the EU's external economic representation was largely a result of an unintentional spill-over from internal regulatory competences into the international arena. Now, the bloc uses its vast arsenal of economic instruments intentionally to further its geostrategic goals. The EU’s push for trade agreements, its ambition to regulate the digital space, investments in defense industries, or the increasingly sophisticated use of restrictive measures, can hardly be explained through a purely functional lens alone. Instead, they are rooted in geostrategic interests of the EU’s member states. The paper discusses three drivers behind the EU’s geo-economic turn. First, the EU adapts to the economic competition on the international level. The big power rivalry, in particular between the US and China, is mainly taking place in the field of trade. The larger question of who sets the technological standards of the future sets the background. Second, the structure of the EU favors economic tools over foreign and security policy. While the European Commission enjoys far-reaching competences to drive the development of standards and manage commercial and financial flows, the Common Foreign and Security Policy (CFSP) has remained weak in the face of competing member state interests. Third, member states delegate the task to ensure ‘European Sovereignty’ to the European Commission. As a consequence, the Commission has changed from a technocratic watchdog into a ‘political’ (Juncker) or even ‘geopolitical’ (von der Leyen) entity.