Germany’s coalition government, led by Chancellor Friedrich Merz’s center-right Christian Democrats (CDU/CSU) and the center-left Social Democrats (SPD), has agreed to develop a National Economic Security Strategy. This would mark the first comprehensive economic security framework by a European Union member state, aligning with and reinforcing the EU’s 2023 Economic Security Strategy. The EU strategy established three core principles: “promote,” “protect,” and “partner,” which have since been expanded through a 2024 Economic Security Package. That package included proposals on research security, dual-use technology development, export controls, outbound investment screening, and foreign direct investment (FDI) regulations. By late 2025, the European Commission plans to release an Economic Security Doctrine to integrate these tools into a cohesive defense of Europe’s economic interests.
Germany, as Europe’s largest economy, occupies a central position in the evolving geoeconomic landscape. However, its institutional framework traditionally separates economic and security policymaking, making coordinated responses to cross-cutting challenges difficult. While interministerial cooperation exists on issues like export controls and investment screening, experts argue that more formalized structures are needed. A national strategy could unify fragmented efforts and provide a clear vision for enhancing resilience in international economic relations.
The proposed strategy should go beyond risk identification and offer actionable pathways to mitigate vulnerabilities while strengthening Germany’s role in global supply chains. It must not be narrowly focused on China, despite Beijing’s significant industrial influence, but instead adopt a global outlook. Key tasks include balancing economic openness with security imperatives, determining how trade-offs will be managed, and clarifying who bears the costs—whether public or private sectors—of increased resilience.
Businesses already shoulder expenses related to climate action and workforce welfare; similarly, they may need to absorb some security-related costs. Yet the state also has a duty to bolster the private sector, not just label companies as security stakeholders. Concrete outcomes tied to the “promote” principle—such as targeted support for strategic industries—must be defined. The “partner” dimension should emphasize export diversification through tailored trade diplomacy rather than broad agreements.
The strategy should establish specific missions based on strategic technologies highlighted by the EU: microelectronics, artificial intelligence, quantum computing, biotechnology, and advanced communications. It could also set goals for reducing dependency in critical sectors like automotive and defense. For instance, one mission might aim to secure a defined level of domestic semiconductor production capacity for essential applications. Action plans would then outline time-bound milestones for both public institutions and industry.
To support this, government ministries require enhanced analytical capabilities for supply chain assessment. Recruiting expertise from industry, academia, and think tanks can strengthen internal capacity. Policies should work with market dynamics rather than override them, applying business-case logic to security-driven initiatives.
Another potential mission involves creating specialized units to identify alternative export markets, integrating security and diversification goals. These are not steps toward state-led economic planning but necessary adaptations to a fragmented, competitive global system where economic coercion is increasingly common.
The national strategy must clarify the division of responsibilities between Germany and the EU. While many tools—such as investment screening and customs enforcement—are managed nationally, they must align with broader European objectives. The EU remains vital for harmonizing rules, defending against unfair trade practices, and countering economic pressure. Additionally, Germany’s 16 federal states play a crucial role in regional economic development and should be integrated into implementation efforts.
Internationally, the strategy should encourage collaboration with allies, particularly within the G7, to share best practices. By developing a coherent approach, Germany can enhance its geoeconomic resilience and maintain a strong position in the global economy. A well-crafted National Economic Security Strategy would offer much-needed direction for both policymakers and businesses navigating an uncertain future.
— news from Internationale Politik Quarterly
— News Original —
Germany Needs to Face the New Economic Reality
The German coalition government of Chancellor Friedrich Merz’ center-right Christian Democrats (CDU/CSU) and the center-left Social Democrats (SPD) has agreed to write an Economic Security Strategy. It would be the first explicit strategy from a European Union member state and complement the EU’s 2023 economic security strategy.
In 2023 the European Commission published its first-ever Economic Security Strategy, which laid out the triad of “promote,” protect,” and “partner” as its three guiding pillars. It followed up with an Economic Security Package in January 2024 that included a proposal for a European Council recommendation on enhancing research security, a White Paper on R&D in dual-use technologies, a White Paper on export controls, a White Paper on outbound investment screening, and a proposal for a new FDI screening regulation. In late 2025 the European Commission also plans to publish its Economic Security Doctrine, outlining how the different instruments in its toolbox to protect European economic security can work together. Essentially, it is trying to move from identifying risks to suggesting how to mitigate them.
In addition to Germany, other EU member states are also intensifying their economic security measures and conceptual thinking. France, long-time supporter of European sovereignty and more naturally inclined to economic security thinking, included economic security as a core tenet of its 2025 Strategic Review, the country’s national security strategy. The Czech Republic and the Baltic states as well as—outside the EU—Norway and the United Kingdom are also including economic security in their national security strategies or the acknowledgement that economic vulnerabilities can be national security risks. As did Germany in its first-ever National Security Strategy from 2023.
At the Frontline
Germany is Europe’s biggest economy and, in many respects, finds itself at the frontlines of the economic security battlefield. Its governance structures are not inherently built for cross-thematic, cross-ministry topics, which are currently dominating the geoeconomic age, because they formally separate between economic and security spheres. Other European states are not necessarily different, to varying degrees.
Admittedly, German policymakers do understand that cross-cutting issues like export controls, investment screening decisions, or support for strategic sectors need close cooperation, and interministerial cooperation does exist. However, some, including this author, have called for more formal geoeconomic structures and expertise within the government. A National Economic Security Strategy might well be a first step toward aligning different thematic units around a common vision on what policies Germany needs to pursue to become more resilient in its international economic integration and strengthen its economic security.
Conceptual Direction
A National Economic Security Strategy would need to complement the EU’s Economic Security Strategy and could thereby provide a much-needed conceptual direction on how the three guiding pillars of “promote,” “protect,” and “partner” transcend into national policy making.
While the EU’s strategy is based on risks to Europe’s economic security, a national strategy should be grounded in clearly-aligned policy objectives it wants to achieve, given the volatile geoeconomic world Germany is facing. It should take the step from identifying risks to creating a concept of how to mitigate them, but also how to strengthen Germany’s position in global value chains.
This new Economic Security Strategy should not be an extended China Strategy. While China remains a big challenge to European industries, because of its size, industrial capacity, and ability to enact strategic economic policies, economic security should be conceived globally.
Resolving Tensions
The German government must give guidance on how it wants to resolve tensions between security and economic interests, how trade-offs will be determined and, most importantly, address the question of how costs (monetary and non-monetary) will be distributed. This includes naming the costs that resilience and security create for the economy and declaring the sovereign interest to incur them where necessary. If the government is to take de-risking seriously, de-risking must happen in supply chains and procurement alike. Some costs for security should be borne by businesses, in the same way as they carry costs to mitigate climate change or contribute to employees’ welfare.
However, at the same time, it is as much in the national interest to strengthen the private sector; this has to amount to more than simply describing businesses as security actors. The government needs to make clear that concepts like “promote” are not abstract expressions but are rooted in qualifiable and quantifiable outcomes it deducts from the risks the EU has identified. Hereby, it should also specifically acknowledge the role private companies play in achieving economic security and inspire a closer relationship of trust that will be necessary to collectively achieve economic security.
Efforts to “promote” should include the coordination of sectoral and research support measures. Likewise, de-risking and strengthening German businesses also needs the “partner” pillar. Here the focus should be on export diversification. All of these ideas should be derived from the policy objectives formulated in Germany’s future National Economic Security Strategy.
Based on the set policy objectives, the government should identify missions and define action plans on how to achieve the missions, with sequential steps over a defined timeline so that economic actors can plan ahead. Very importantly, a national economic security strategy should enshrine agility in its concept by providing space for adapting the missions and action plans.
Missions and Actions Plans
A National Economic Security Strategy should identify such missions for technologies of strategic importance as identified in the EU’s Economic Security Strategy (microelectronics, artificial intelligence, quantum computing, biotechnology, and advanced communication technology), but also for key economic sectors and more abstract policy objectives, such as diversifying supply chains and reducing export dependency.
For these missions, it could develop specific resilience criteria —positive and negative ones. Thereby the strategy can serve as the guiding conceptual piece, which outlines what the government is ready to do to protect German strengths and to promote strategic sectors. These criteria could then be addressed in the smaller action plans. Through such criteria it not only answers the question of what is the risk, but also where do we want to get to?
For example, Germany regards microelectronics as an important strategic technology and enabler to nearly all sectors. It is also developing a dedicated microelectronics strategy. One of the missions in the National Economic Security Strategy could be directly derived from the forthcoming microelectronics strategy, for instance protecting the position of German companies in global value chains or achieving a defined degree of manufacturing capacity for certain semiconductors in Germany. In the latter case, this could be semiconductors that are specifically used in the defense sector or that are essential to another economically important sector, such as automotive. Action plans could then define milestones for public authorities and the businesses to be achieved within set timeframes. These action plans would further define the goals of a microelectronics strategy and specify them from the economic security perspective. Both strategies interact here, but with the crucial addition that the National Economic Security Strategy bridges further into the security realm of the government and possibly includes sectors beyond microelectronics producers.
For this to be incentivized, supply chain analysis capacity is needed within the government. The strategy should argue in favor of endowing the ministries with sufficient personnel capacity to fulfill such analyses and avoid costly mistakes by bringing together industry and economic security units. A business case logic should be part of the conception of action plans while pursuing security considerations, working with the market where possible instead of trying to replace it. Additionally, outside expertise from industry, science, and think tanks should be attracted, building broader in-house expertise within the government.
Another more abstract mission could be to support German business in export diversification through granular trade diplomacy, not necessarily through broad trade agreements, but through specific initiatives for strategically important sectors. The action plan could foresee the creation of a dedicated unit to only focus on analyzing alternative market opportunities for certain sectors, with security and diversification considerations in mind.
Such missions are not a venture into state planning, but rather are necessary to adapt the German economy to a new geoeconomic world, which is highly competitive, fragmented, and overridden with security regulations—one where following rules can no longer always be relied upon and economic coercion is part of the game. The old order is not going to reappear. Economic security is a cornerstone of this new world and Germany should not stand by while it is being defined. Businesses have to adapt themselves to a changing global environment and are already identifying the challenges, for example in machinery, industry, or microelectronics, that governments have to take on together with their private sector.
A National Strategy Within a European Framework
Finally, the strategy would need to include commitments to protect economic strengths through evolving export controls, investment screening, and research security measures, but also to defend national interests vis-á-vis third parties and through the EU where necessary. The National Economic Security Strategy should thus define what should be done at the national level and at the European level. Many economic security instruments, such as investment screening, customs controls, but also many industrial measures or even granular trade diplomacy are within the national level, while they must be complementary to EU efforts and should not run counter to European efforts.
Also, the EU is the best place for harmonizing policy measures and further integration of the European market, but also for protecting European companies against unfair trade practices or the EU against economic coercion. In addition to the federal national level, German policymakers should also pay attention to the role of the state governments in achieving the desired outcomes, as Germany’s 16 federal states can actually support the efforts of the national government and are often more closely involved in economic activities in their regions. In the international sphere, a strategy should promote cooperation and best-practice sharing with interested partners and friends, at least amongst the G7 if not beyond.
Germany has the chance to improve its geoeconomic resilience and strengthen its global economic position by thinking through the challenges and opportunities thrown up by the new reality it is encountering. A National Economic Security Strategy can provide much needed guidance and reassurance on the way forward for both policymakers and businesses alike. It would be good if that opportunity were seized whole-heartedly.