The Shift to a New Global Order: Companies and the European Union’s Rising Geopolitical Muscle

New article by Johannes Leitner and Hannes Meissner

For the latest issue of REFLECTIONS – Magazine of the Austrian Institute for International Affairs (oiip), Dr. Johannes Leitner and Dr. Hannes Meissner wrote the article The Shift to a New Global Order: Companies and the European Union’s Rising Geopolitical Muscle. In their contribution, they examine how geopolitical rivalries are increasingly shaping the global economy and drawing companies deeper into strategic competition between the United States, China, and the European Union.

Drawing on cases such as the Dutch semiconductor equipment manufacturer ASML and the impact of Chinese export restrictions on the German automotive industry, the authors demonstrate that companies are no longer merely economic actors. Instead, they are increasingly becoming both instruments and targets of geoeconomic power politics.

Leitner and Meissner devote particular attention to the European Union’s emerging geo-economic toolbox, including the Anti-Coercion Instrument (ACI), the Blocking Statute, the International Procurement Instrument (IPI), and the Foreign Subsidies Regulation (FSR). These measures are designed to strengthen Europe’s economic resilience and reduce its vulnerability to external pressure.

At the same time, the authors emphasize that the effectiveness of many of these instruments remains largely untested and has yet to be demonstrated under real-world geopolitical conditions. Past experiences, such as the limited success of the Blocking Statute in countering U.S. sanctions against Iran, highlight the constraints of European regulation in situations characterized by significant asymmetries of economic power.

Moreover, the article makes clear that companies frequently find themselves caught between political objectives and economic interests. While Brussels promotes strategic autonomy and de-risking, global markets, existing dependencies, and commercial profitability continue to be decisive factors in corporate decision-making. The authors thus point to a fundamental tension: the EU expects companies to play an active role in implementing geopolitical strategies, yet it does not always possess the political and economic means to enforce these expectations effectively.

The article concludes that companies have become a central interface between economics and geopolitics. Whether the European Union truly possesses the geo-economic leverage necessary to advance and defend its interests in an increasingly fragmented global order, however, remains an open question.

Follow the link to the article.