Governing Capital in a Geoeconomic Age: The Rise of Outbound-Investment Screening in the European Union

Economic security has become an increasingly important lens through which the European Union understands its external economic and geopolitical relations. This reflects a broader global shift toward geoeconomic forms of statecraft. While most existing scholarship focuses on the EU’s mechanisms for screening inbound foreign investment, the regulation of outbound investment has only recently emerged as a significant arena where economic and security concerns meet. The paper is co-written by Nick Sitter and Ulf Sverdrup This paper examines the rise of outbound-investment controls through a comparative analysis of recent developments in the United States and the European Union. It maps the emerging policy frameworks and interprets their evolution using insights from geoeconomics, economic-security theory, and perspectives on European governance. It also assesses possible institutional designs for a future EU outbound-screening regime. The analysis highlights the tensions these controls pose for the EU’s liberal economic order. These include challenges for the free movement of capital, the openness of markets, and the EU’s efforts to navigate a more competitive and uncertain global political economy and the intense technological competition between geopolitical rivals. The paper argues that the emergence of outbound-investment screening reflects a broader structural shift in how states—and the EU—conceptualize and regulate cross-border capital. This shift signals a move toward a more strategically governed and security-oriented economic order.