The Geoeconomic Turn of the Single European Market? Conceptual Challenges and Empirical Trends

Abstract

The nature of global economic interactions is undergoing profound changes. Rising concerns over the security and strategic implications of economic interdependence are leading to what is often defined as a ‘geoeconomic world order’. In framing this Special Issue, this article sets a common conceptual ground to assess whether, how and why the single European market is experiencing such a geoeconomic turn and how EU responses are shaping other international actors in the process. It develops a research agenda to examine (i) the systemic pressures pushing towards geoeconomic responses, (ii) the internal drivers and processes determining the nature of the EU's geoeconomic turn (what we term ‘shades of geopoliticisation’) and (iii) the external consequences of the EU's embrace of geoeconomics. The analytical discussion is complemented by an overview of empirical trends, drawing examples from the various fields of market integration and European policy‐making covered in the contributions to this Special Issue.

The Geoeconomics of the Single Market for Financial Services

“…The internal and external dimensions of the Single Market are interconnected in that the EU engaged in a process of 'double debordering' (Schimmelfennig, 2021) by removing barriers to intra-EU trade in goods (first) and services (later) as well as barriers to trade with third countries. By doing so, the EU sought to manage globalisation at home (Jacoby and Meunier, 2010), whilst contributing to developing international trade and financial liberalisation (Herranz-Surrallés et al, 2024).…”

“…We postulate that major changes in the international economic and political system were conducive to the geoeconomic use of the Single Market for financial services. The increased use of the Single Market in this way occurs in part as the EU witnesses increasing challenges to the liberal international order (see Herranz-Surrallés et al, 2024). In fact, several authors have argued that, at the end of the second decade of the 21st century, the foundations of the liberal international order had already begun to unravel (Börzel and Zürn, 2021;Chessé and Verdun, 2023;Lake et al, 2021).…”

“…The main rationale of geoeconomic measures is not the achievement of mutually beneficial economic gain but rather the pursuit of geostrategic advantages by seeking relative rather than absolute gains. We set out to address two sets of issues that inform the debates that are central to this special issue (Herranz-Surrallés et al, 2024): (i) to examine the geoeconomic use of the Single Market in financial services and (ii) to explore instances in which the EU has demonstrated geoeconomic actorness.…”

“…First, at the systemic level, there were growing challenges to the liberal international order (which the editors of this special issue refer to as 'systemic pressures'; see fig. 1 of Herranz-Surrallés et al, 2024). Second, at the domestic (here meaning EU) level, there was the EU's ability to use its Single Market for geoeconomic purposes.…”

The EU's Geoeconomic Turn: From Policy Laggard to Institutional Innovator

“…Policy guided by liberal institutionalism sees economic interdependence as generating economic welfare and positive security externalities through the pacifying effects of commerce. Policy guided by a geopolitical lens, in contrast, sees interdependence primarily as a source of power to 2 See also Herranz-Surrallés et al (2024) in this volume regarding external pressure, EU internal change and feedback loops.…”