Capital flows: the European Union committed to securing supply chains

On June 20, 2023, the European Commission and the High Representative of the Union for Foreign Affairs, Josep Borrell, published a “joint address on a European strategy for economic security.” In particular, it raises the need to mitigate risks “involved in certain capital flows amidst heightened geopolitical tensions and accelerated technological changes.”

This address does not provide for any operational measures. However, it affirms a political will to prioritize the security of exchanges over their facilitation, in particular for critical sectors. By giving preference to some degree of regulation over unbridled competition, it marks a paradigm shift in the European Union, which began several years ago.

In particular, the text stresses strengthening supply chain resilience. It therefore calls for prioritizing contractors and providers that guarantee a high degree of sovereignty, over those with the lowest bids.

The text also advocates a better assessment of threats against the physical and digital security of critical infrastructure. Finally, it emphasizes the need for maximum-security standards in European technology, in order to prevent leaks. These points are all in keeping with the NIS2 directive, which was passed last year, and will come into effect in the second term of 2024.