The changing politics of foreign investment in Europe
Funded by Independent Research Fund Denmark | Hosted by the University of Southern Denmark
Since 2019, the European Union has attracted international attention by adopting the first pan-European investment screening mechanism and initiating regulation on foreign subsidies distorting the internal market. These initiatives are part of a new strategic agenda aimed at creating a more secure and a fairer level playing field for the European economy in an increasingly turbulent domestic and international context.
A decade after the Treaty of Lisbon in 2009 transferred competences to the EU in matters of foreign direct investment (FDI), these initiatives thus mark the birth a significant European investment screening regime complex. The core features of this emerging European investment screening regime complex are:
- the institutionalization of routine processes of collaboration and exchange of information;
- its pan-European scope;
- its multi-level and decentralized decision-making process;
- its dynamic and flexible sector coverage; and
- its built-in revision clause.
What drives the emergence of this new investment screening regime complex? And what does it mean for open European markets? These questions resonate forcefully in the current Covid-19 pandemic, which has affected global FDI flows negatively.
Why ‘beauty contests’
Advanced economies have entertained an ambiguous relationship to foreign direct investment, considering it sometimes as ‘the beast’, sometimes as ‘the beauty’ of capitalism (Linsi 2016)*. ‘Beauty contests’ explores the return of ambiguity in Europe, after several decades of global competition for attracting foreign investment.
*Lukas Linsi, 2016, How the Beast Became a Beauty: The Social Construction of the Economic Meaning of Foreign Direct Investment Inflows in Advanced Ecomomies, 1960-2007. A thesis submitted to the Department of International Relations of the London School of Economics for the degree of Doctor of Philosophy, London.
Research questions, objectives and contributions
The birth of the new EU investment screening policy regime is puzzling for several reasons. Our project will contribute new knowledge on the ideational transformation of trade and investment policy and its implication for the redrawing of economic borders in contemporary Europe.
The research organization
The research is designed ‘on the move’, following people, places, and policies over space and time. With policy sources from France, Germany, Italy – With EU lawmaking as policy destination – And the role of business as affected interests.