Gatekeeping Europe
the EU’s fdi screening mechanism in a shifting global order
DOI:
https://doi.org/10.60054/PEU.2025.12.45-55Keywords:
foreign direct investment, strategic autonomy, investment policy, economic security, global competitionAbstract
This paper examines the development of the European Union’s Foreign Direct Investment (FDI) Screening Mechanism as a response to mounting geopolitical tensions and the securitisation of economic policy. It traces the progression from the coordination-based Regulation (EU) 2019/452 to the more assertive 2024 reform proposal, showing how strategic concerns -- particularly over Chinese investment -- have reshaped the EU’s approach to foreign capital. While aiming to balance strategic autonomy with continued openness, the EU has seen declining FDI inflows and a shrinking share of global investment, raising concerns about competitiveness. By assessing policy developments and investment trends, the paper evaluates whether the screening regime can enhance economic security without fragmenting the single market or deterring investment. The findings highlight the EU’s effort to reconcile liberal market commitments with growing demands for control, resilience, and geopolitical awareness.
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