Europe’s turn to strategy: How law is reshaping markets and economic power

As the EU increasingly uses industrial policy, trade instruments, and regulation to pursue strategic objectives, this shift opens a broader set of questions about economic governance. Through which legal and political rationalities are new forms of economic intervention justified? What are the distributive effects of economic statecraft? And how is the rise of economic statecraft transforming the European economic governance and changing the relationship between public authority and private economic power? 

The implications of economic statecraft in the EU 

Kampourakis stresses that these questions are especially important in light of the normative implications behind the turn to strategy. "Economic statecraft involves greater executive coordination and discretion in ways that may empower politics at the expense of anonymous processes of market coordination. But greater state intervention does not necessarily mean greater democratic control over the economy: public power may also be mobilised to support private accumulation. While the turn to strategy may therefore expand public capacity to steer the economy, it also raises questions about accountability, participation and, ultimately, democratic control. A central concern of the STRATEGIC LAW is therefore not only to understand the emerging institutional architecture of European economic statecraft, but also to ask how the turn to economic statecraft can be democratised." 

STRATEGIC LAW investigates how law enables new forms of strategic economic intervention, while also asking how the EU’s existing legal and institutional architecture shapes, and potentially constrains, the possibilities for more profound socio-economic transformation. The project therefore asks not simply whether the state is 'returning', but what kind of capitalism is being constructed through this new relationship between public power and markets. The project focuses particularly on developments across industrial policy, trade and economic security and defence. 

How does law enable and constrain this socio-economic transformation? 

While existing research has often examined developments in industrial policy, trade, strategic autonomy, critical raw materials and defence separately, STRATEGIC LAW investigates the recurring legal rationalities and governance techniques that cut across these fields, asking whether they should be understood as manifestations of a deeper shift towards economic statecraft. 

Second, and perhaps more profoundly Kampourakis adds: "The project examines this transformation through the lens of law, asking how emerging forms of economic statecraft reorganise the relationship between public authority and private economic power. In doing so, it complements political economy scholarship that has sought to conceptualise the contemporary transformation through concepts such as ‘state capitalism’, ‘political capitalism’, and ‘post-neoliberalism’. STRATEGIC LAW asks how changes in the organisation and exercise of economic power are constituted, enabled, and constrained through law, and what they reveal about the changing institutional organisation of contemporary capitalism." 

The democratic stakes of economic statecraft 

STRATEGIC LAW aims to develop a legal and institutional theory of economic statecraft, providing a systematic account of how legal architectures enable, organise, and constrain emerging transformations. "My objective is to develop a common analytical vocabulary for studying strategic economic coordination across different fields and domains." 

But Kampourakis stresses that the impact of this change goes beyond academia and impacts us all: "As the European political economy is being transformed, we need the analytical tools to understand what is changing, with what consequences, and what possibilities for a more democratic political economy this transformation may open or foreclose. The current transformation also has high normative stakes: democratising economic statecraft requires thinking not only about counterbalances to increased centralisation but also about forms of expanded social participation in decisions about the allocation of productive and investment resources. These questions are particularly important if the EU is to pursue strategic objectives behind the green- and digital transitions while countering the risks of executive centralisation and emerging authoritarianism." 

Developing the tools to understand and address the impact of economic statecraft 

Kampourakis recently also received a Veni grant and explains how these research projects are aligned "My Veni project focused on the emergence of a paradigm of market instrumentalism in the context of the European green transition and critical raw materials. Its central observation, the increasing use of markets as instruments for pursuing public objectives, provided an important starting point for STRATEGIC LAW. The ERC project moves beyond the green transition and takes critical raw materials as an empirical entry point for investigating a broader reconfiguration of EU governance through the rise of economic statecraft." 
 
Kampourakis reacts to receiving the grant: "Naturally, I was delighted to be awarded this grant. I believe the current conjuncture is a moment of flux, characterised by important analytical gaps and normative challenges. Our tools of analysis and critique seem to be in need of an update. Critiques of EU economic governance have often focused on its depoliticising features and its commitment to safeguarding the competitive order rather than actively producing social value. But does this critique adequately capture the present moment? What becomes the target of critique when public institutions are increasingly seeking to steer markets towards strategic objectives? And if the terms of critique are changing, so too must our thinking about alternatives: where should civil society actors and social movements direct their energies in pursuit of a more democratic political economy? STRATEGIC LAW is, ultimately, an effort to develop the analytical and normative tools needed to address these questions." 

About the ERC starting grants

The European Research Council (ERC) announced the winners of its latest Starting Grant competition on 3 September. The funding, worth €705 million in total, will go to 421early-career researchers across Europe. The grants will help researchers develop ambitious ideas, build their own teams and establish their independence at a pivotal stage in their careers.