European Economic Diplomacy Facing Contemporary Geopolitical Crises: Between Strategic Autonomy, Competitiveness, and the Transition Toward Sustainable Development

Abstract

The return of war to the European continent, the energy shock
triggered by Russia’s invasion of Ukraine, and the widening
trade deficit with China have forced the European Union to
rethink the instruments of its economic diplomacy. This article
asks how EU economic diplomacy is adapting to the combined
geopolitical, economic, and environmental conjuncture while
reconciling strategic autonomy, international competitiveness,
and sustainable development. Building on the theoretical
contributions of Keohane and Nye on complex
interdependence, Rodrik’s globalization trilemma, Porter’s
competitive advantage of nations, and Stiglitz’s critique of
asymmetric globalization, the study develops a qualitative,
document-based comparative analysis of four policy
instruments adopted between 2022 and 2026: REPowerEU, the
Carbon Border Adjustment Mechanism (CBAM), Global
Gateway, and the broader ―open strategic autonomy‖ doctrine
embedded in the Competitiveness Compass and the Clean
Industrial Act. Evidence is drawn from Eurostat trade statistics,
European Commission communications, IMF World Economic

Outlook data, World Bank trade monitoring reports, OECD
economic outlooks, and WTO trade statistics covering 2022
through mid-2026. The analysis shows that the EU has shifted
from a primarily normative and market-based diplomacy
toward a more defensive, security-conscious posture, yet this
shift remains constrained by internal contradictions: CBAM
advances climate objectives while straining relations with
developing-country exporters; Global Gateway pursues
geopolitical positioning more than partner-country development
needs; and ReArm Europe diverts fiscal space away from the
green transition at the exact moment energy security requires
accelerated investment. The findings suggest that European
economic diplomacy increasingly resembles defensive
mercantilism wrapped in sustainability language, a
configuration that creates real but partial autonomy rather than
the comprehensive sovereignty the EU’s own communications
claim to pursue. The article proposes a differentiated typology
of crisis response and offers policy recommendations
addressing the sequencing of defense, energy, and climate
spending under tightening fiscal constraints.