Issue Security-driven economics and the efficiency cost of strategic autonomy

Summary

The report characterises current geopolitical dynamics as a permanent instability of the world order, with great uncertainty about how the balance of power will evolve. In this setting, economic relations are increasingly shaped by considerations of security and resilience, as countries try to minimise strategic dependencies. The European course toward strategic autonomy is a clear example, and the report expects EU trade policy to be used more intensively as a geopolitical tool. The report points out that this shift comes at the expense of economic efficiency and hence of financial prosperity. In its economic chapter it adds that firms are being pushed from cost-efficient just-in-time supply toward security of supply and strategic stockpiles, which raises costs structurally.