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Naïve no more: Foreign direct investment screening in the European Union

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  • Sarah Bauerle Danzman
  • Sophie Meunier

Abstract

This paper asks what explains the creation and comparative features of national Investment Screening Mechanisms (ISMs) in Europe. After providing a brief history and definition of ISMs, we provide descriptive patterns about the similarities and differences in the investment screening features of national ISMs in EU member states. We then explain differences in national screening policies by focusing on the role of public debt, Chinese investment, R&D expenditures and various geographic groupings. Finally, we make three policy arguments about the rise of ISMs in Europe: (1) ISMs have not been designed as protectionist instruments, (2) the politics of inward investment screening reflects a shift from economic to security logic in addressing the fundamental tension between the benefits and vulnerabilities of open markets and (3) the EU can use the ‘commercialisation’ of security to extend its own competence in the security sphere. We conclude by considering how the rapid expansion of investment screening in Europe could affect economic openness, as well as the role of the EU as a global actor.

Suggested Citation

  • Sarah Bauerle Danzman & Sophie Meunier, 2023. "Naïve no more: Foreign direct investment screening in the European Union," Global Policy, London School of Economics and Political Science, vol. 14(S3), pages 40-53, July.
    • Handle: RePEc:bla:glopol:v:14:y:2023:i:s3:p:40-53
    DOI: 10.1111/1758-5899.13215
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    Cited by:

    1. Guri Rosén & Sophie Meunier, 2023. "Economic Security and the Politics of Trade and Investment Policy in Europe," Politics and Governance, Cogitatio Press, vol. 11(4), pages 122-128.
    2. Christian Freudlsperger & Sophie Meunier, 2024. "When Foreign Policy Becomes Trade Policy: The EU's Anti‐Coercion Instrument," Journal of Common Market Studies, Wiley Blackwell, vol. 62(4), pages 1063-1079, July.
    3. Pierre Haroche, 2024. "Geoeconomic Power Europe: When Global Power Competition Drives EU Integration," Journal of Common Market Studies, Wiley Blackwell, vol. 62(4), pages 938-954, July.
    4. Guri Rosén & Sophie Meunier, 2023. "Economic Security and the Politics of Trade and Investment Policy in Europe," Politics and Governance, Cogitatio Press, vol. 11(4), pages 122-128.

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