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The European Policy Centre’s second Economic Security Forum in Brussels (BESF2026) concluded recently with a clear message: Europe must rely on a creative economic resilience as the global fragmentation deepens. During two days, leaders, policymakers and industry experts examined how to diversify supply chains, secure critical technologies and reduce vulnerabilities linked to trade shocks and strategic dependencies.
Background
Since its inception in 2022, the Brussels Economic Security Forum (BESF) has been regarded as the European leading platform and research initiative on economic security. It’s organizer – the EPC – has been instrumental in defining economic security as a central tenet of the EU-wide policy discussions’ panel.
Reference to: https://besf.epc.eu/
As is known, in the European integration process, the economic security theme is a shared responsibility between the EU and the states; but the industrial sectors (although being of a supplemented competence) are having priority in growth. It is presently lagging behind and has to be recovered as a rapidly diversified and strategically resilient with strong “business models”, said European Commissioner for Trade and Economic Security Maroš Šefčovič.
He noted at the Forum that “the cost of inaction” could be higher with every passing month; and that the best way to avoid a “weaponised interdependence is to diversify”; i.e. coped with numerous critical supplies from around the world.
In strategic diversification, the Commissioner underlined, the EU has made some progressive steps in its economic security strategy and industrial policy by addressing diversification, particularly on critical resources.
European challenges: opinions
The EU member states are facing the economic security challenges alongside other European countries: thus, the UK Secretary of State for Business and Trade Peter Kyle told the Forum that the UK has introduced numerous measures to strengthen the British economy. “In the name of resilience, we’ve become very interventionist: the ministry has become a stabilizer and supplementing stability in uncomfortable conditions”; he added that it was “a frustration that we spend so much time mitigating challenges rather than creating opportunities.”
The EU is responding financially to economic security challenges: thus, according to the European Investment Bank (EIB) President Nadia Calviño, the bank is heavily investing “to contribute to this goal”; and that the “economic security is also about what the EU can build and create on its own”. The EU has numerous competitive advantages, with the centers of excellence in quantum, advanced manufacturing, biotech and aerospace – those so-called “frontier fields where tomorrow’s security and prosperity will be determined”, she added.
Lithuanian Minister for Foreign Affairs Kęstutis Budrys reminded that the economic challenges Europe is facing “are global, with states increasingly employing trade, finance and industrial tools for geopolitical ends”; however, he notes, Europe is particularly vulnerable both in economic growth patterns and in industries for the defence sectors.
The Forum identified China as a “significant economic challenge for Europe” due to China’s size and excessive state “trade dumping”; however, Michael Pettis, Professor at Peking University, argued that Chinese firms were not solely responsible for undermining European production. Rather, he reminded that the EU firms “were not investing more in manufacturing” because of the lack of profitability. But even with more funding, the expansion would not follow: competition works when it shifts resources to more efficient players; but “China subsidies pushed costs so low that EU firms could not compete”, Pettis added.
Still, European University Institute Professor Mari Demertzis warned against a more confrontational economic policy: “there will come a day that we realize the zero-sum is not working out for anybody; that’s where we’re heading to.”
References and citations from: https://ec.europa.eu/economy_finance/brussels-economic-forum/2026/index.html
EU’s financial security
The EU’s economic security rests on foundations it does not fully control. As a strong supporter of open trade with a functioning multilateral system, the EU has been left with significant dependencies on energy imports, strategic vulnerabilities in critical raw materials and defence, and an overreliance on trade as a primary source of growth. In a harsher geoeconomic and geopolitical environment where coercion is frequent, the EU needs to rethink not only its growth model but also how to preserve its ‘business continuity’.
An additional and significant vulnerability is within the EU’s financial dependence on currencies, assets and payment infrastructures that can be weaponised. The EU’s financial dependencies stem directly from the dollar’s centrality in the global system of financial flows. Instruments such as the currency itself, sovereign and private assets and the payment and settlement infrastructure can be (and have been) employed to sanction and coerce adversaries. This has occurred alongside decades of increasing cross-border financial integration, as evidenced by growth in global banking claims and total financial assets. The deep financial integration and reliance on the dollar are attractive means of exerting economic coercion, and in recent decades, US financial sanctions have spiked accordingly.
To address the dependencies, the Forum underlined, the EU would need to pursue the following steps:
=First, expanding the use of the euro in trade invoicing and settlement, allowing European firms to price, pay, and hedge more transactions in their own currency. Increasing the international role of the euro is a pivotal way of regaining greater flexibility in the way that the EU economy relies on currencies.
= Second, reaching the objective of internationalising the euro cannot easily take off in the absence of a single safe asset, namely, common debt. The US has been willing to provide abundant assets to meet global demand and, as a result, sustained the dollar’s global status.
= Third, in order to make the euro more international, the ECB must take on greater responsibility for providing a financial safety net. This involves establishing a liquidity-line framework, commensurate with the international role of the euro it envisages, to have a clearer role as a global supplier of euro liquidity during crises. The ECB has already made some progress in this area by expanding the repo facility for central banks (ECB 2026), but for the world to increase its demand for the euro, it would need access to liquidity, similar to what the US has provided in the past.
= Finally, the euro area needs to strengthen its payment sovereignty through the digital euro for retail purposes. As digital payments become increasingly popular, the euro zone needs both a single domestic pan-European payment method, currently lacking, and less dependence on non-European providers that could be weaponised.
But the functions of the dollar, both as a store of value and a means of payment, are currently being challenged. While the US economy, which underpins the dollar’s credibility, is not under an imminent threat of collapse, there are signs of both economic uncertainty and a reluctance on the part of the US to support the global economy. The dollar as a means of payment is already under challenge, not least by the imposition of sanctions by the US itself, which have de facto fragmented international payments and pushed countries to innovate to provide alternatives. The direction of travel for the dollar’s international role is clear; the speed less so.
Source and citations from:
https://www.epc.eu/publication/the-eus-financial-security-in-a-shifting-transatlantic-relationship/
More bibliography on the issue is in the following sources: = European Banking Authority (EBA), (2025) Report on EU banks’ funding structure and their dependence on foreign currency funding. = Bank for International Settlements (2025), Locational banking statistics, BIS WS- LBS-D-PUB 1.0, dataset. = Financial Stability Board (2024), “Global monitoring report on non-bank financial intermediation 2024”. = Emter, Lorenz et al (2026), “Global banking and geopolitics through time”, BIS Working Paper no. 1338, Bank for International Settlements. = Cipollone, Piero, “Empowering Europe: boosting strategic autonomy through the digital euro,” introductory statement at the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 8 April 2025. = European Central Bank (ECB) (2024), “Box 4: The role of foreign currency mismatches in the transmission of global financial shocks,” in: Financial Stability Review.
Economic vs. traditional security
Economic security differs fundamentally from traditional security threats: i.e. the economic security is far more complicated and severe; harmful outcomes can arise without explicit hostile intent. A country subsidising its own industry may seek a strategic advantage, increasing the capacity to coerce others or it might primarily seek domestic growth rather than harming others. Yet the resulting excess capacity, market distortions or strategic dependencies can still create severe vulnerabilities abroad.
Economic security threats are often systemic: i.e. vulnerability is not only about denial of access to critical technologies or inputs; it can stem from price shocks, supply chain concentration, investment dependencies or the gradual erosion of industrial capacity. Economic coercion rarely resembles a sudden military strike – the cumulative effect only becomes visible once dependence is deeply entrenched.
Often, the “economic threat” lies less in actions already taken than in the possibility that economic leverage could one day be weaponised. The rational response is to build contingencies before they are needed, though it creates another dilemma: protective measures often impose costs on those deploying them. As soon as the use of these measures is non-automatic, deterrence may lack credibility.
Bottom-line. Ultimately, economic security often creates a governance dilemma: who decides when the line has been crossed and collective action is justified? For Europe, fragmented national responses will be ineffective against systemic vulnerabilities embedded in integrated markets and global value chains. Only common European action can provide the scale, credibility and coordination needed to manage economic security risks effectively.
Reference to: https://www.epc.eu/publication/economic-security-dilemmas-differ-from-traditional-security-threats/