Fundamental Freedoms in the Economic Security Era: Who Will Save Intra-Eu Investments?

In just a few years, the deterioration of trade relations between the world’s largest economies, the COVID-19 pandemic, Russia’s war of aggression in Ukraine and a global increase in geopolitical tensions triggered new global risks connected with globalisation and profound technological shifts. The traditional dichotomy between economic and military risks has grown indistinct, bringing both economy and defence in the array of security concerns. Market liberalization, which the doctrine of interdependency traditionally welcomed as a tool to ensure prosperity, began to be regarded as a source of potential security threats.

At the European level, the need to balance the Union’s traditional openness to trade and investments with a comprehensive strategy to protect its economy and citizens culminated with the adoption of an European Economic Security Strategy on 20 June 2023 and its implementing measures on 24 January 2024.

By bringing economic concerns closer to the sphere of security, the Economic Security Strategy creates new needs for certainty in the single market. These needs emerge quite significantly in the field of investments screening, where Member States still retain great discretion.

Focusing on the EU framework for investment screening, this paper aims to spark a reflection around the notion of economic security within the EU single market and the negative effects that a fragmented approach to economic security might have on market integration, and in turn on competitiveness for EU players, across many sectors. To clarify the scope of Member States’ manoeuvre, the paper looks at the case law of the Court of Justice of the European Union (CJEU) on restrictions to fundamental freedoms, which to date remain the main outer limit to distinguish genuine security claims from purely protectionist measures in application of screening provisions to intra-EU transactions.