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1. Recognizing ‘Geoeconomic Risk’: Rethinking Corporate Risk Management for the era of Great-Power Competition

Author:
Christian Fjader, Niklas Helwig, and Mikael Wigell
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
As economic policy has become a key strategic means in great-power rivalry, states are attempting to control the economic networks that connect the world. By instrumentalizing businesses they change the risk picture for both public and private companies. The securitization of the economy entails a first source of new risk as states attempt to strengthen their control of companies in sectors considered strategic and security-sensitive. Another source of risk stems from the balkanization of the global economy, whereby it would disintegrate into separate spheres of economies decoupled from each other. The competition for control of the global standard-setting regimes constitutes an emerging area of such risk. A final source of risk is the weaponization that accelerates the use of sanctions and export controls. It entails more barriers for companies and puts pressure on the rules-based international system. A novel concept of ‘geoeconomic risk’ is therefore needed to identify, assess and mitigate these new uncertainties associated with the repurposing of the global economy.
Topic:
Security, Sanctions, Conflict, Economic Development, and Rivalry
Political Geography:
Global Focus

2. Sharpening EU sanctions policy for a geopolitical era

Author:
Niklas Helwig
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The European Union (EU) increasingly uses sanctions in order to respond to breaches of international norms and adverse security developments in its neighbourhood and beyond. This study provides a comprehensive analysis of the current state of EU sanctions and discusses options on how to maintain them as an effective tool. The study identifies the withdrawal of the UK as one of main architects of the instrument and an increasingly unilateral and unpredictable US sanctions policy as key challenges. In addition, the EU’s machinery for planning, deciding, implementing and enforcing sanctions exposes vulnerabilities in an increasingly geopolitical environment. The current shifts in international relations constitute an opportunity to clarify the strategic nature of EU sanctions and to fine-tune the sanctions machinery. EU unity and a joint diplomatic approach to international crises are vital for the success of the policy tool. Consequently, the efforts to improve the instrument need to ensure member states’ ownership of EU sanctions policy. Our economic analysis of Russia sanctions and countermeasures reveals rather minor macroeconomic repercussions for the EU and Finnish economy. The efforts to sharpen EU sanctions policy is important for Finland as one of the smaller and export oriented countries in the EU given the increasingly turbulent world marked by geopolitical competition. This publication is final report of a research project conducted by FIIA and ETLA entitled “Development of EU’s Sanctions Policy: Political and economic implications for Finland”. The project is part of the implementation of the Government Plan for Analysis, Assessment and Research for 2019
Topic:
Diplomacy, Regional Cooperation, Sanctions, and European Union
Political Geography:
Europe

3. EU Sanctions Against Russia: Europe brings a hard edge to its economic power

Author:
Kristi Raik, Juha Jokela, and Niklas Helwig
Publication Date:
10-2014
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The EU has responded to the Ukraine crisis with a set of political and economic sanctions against Russia which constitute a qualitatively new step in the EU sanctions policy. The EU sanctions against Russia are exceptional and have strategic importance due to a combination of three factors: big power rivalry, the context of a major European crisis with global ramifications, and the costs of the sanctions for the EU itself. The EU has managed to maintain its fragile unity and has applied its collective diplomatic and economic weight in very difficult circumstances. The sanctions have not provided an alternative to diplomatic efforts to solve the crisis - on the contrary, hardening sanctions have been used as a way to put pressure on Russia to seriously engage in diplomacy. The impact of the sanctions on daily developments in Ukraine has been limited and uncertain, but the sanctions have imposed a long-term cost on Russia for violating key international norms. The policy process of Russia sanctions has exposed problems of leadership and coordination. The latest reform of the EU foreign policy machinery has streamlined the preparation of sanctions, but the current system still lacks the necessary resources to match the growing importance of the EU sanctions policy.
Topic:
Conflict Prevention, Power Politics, and Sanctions
Political Geography:
Russia, Europe, Ukraine, and Asia