CARAYON F-X., Les États prédateurs- Fonds souverains et entreprises publiques à la conquête de l’Europe (The Predatory States – Sovereign Wealth Funds and Public Enterprises Conquering Europe), Éditions Fayard, 305 pages.

 The author wishes to create a reading grid in order to make us aware of the actions of sovereign wealth funds and public enterprises. Since the 2000s, states have acquired more assets than they have sold on a global scale. Behind this fact we find essentially “developing powers”. Public investors generally cultivate secrecy by hiding their investments behind cascading corporate structures. These funds have become the silent weapons of the economic war that states wish to lead by building the conditions to impose their will in the international order of tomorrow. The financial crisis of 2008 suddenly highlighted their power.

Thanks to their considerable resources and flexible budgetary constraints, sovereign wealth funds can afford to take risks and bet on the long term. They are becoming key players in many sectors and in the technologies of the future. The financial assault of predatory states is probably just beginning.

The European Commission has determined that many private strategic sectors are now half controlled by non-European players, which opens the possibility of systematic looting of our best assets. Europe has become aware of this with much delay and we appear in the eyes of other economic players as the weak link. The analysis of political relations between states reveals that as a result of sovereign investments, the international policy positions of target countries tend to align with those of the investing countries. The actual capacity of a harmful investment is difficult to assess, but even the tacit threat invites docility. These dependencies make us vulnerable to political pressure. In the future, in case of strategic disagreement, they will provide powerful tools of threat and could turn into lethal weapons. In a quarter of a century, the center of gravity of world wealth production has shifted at an unprecedented speed. Europe is undoubtedly the region that has lost the most in this movement.

The author asks the real question: are we ready to consider economic security as a component of European collective security? This broader vision of security – adopted by the United States, Japan, Australia, and Canada – would allow the system to become a defensive weapon of choice in international competition.  The European Commission and the other institutions of the Union refuse to do so. The author makes a number of proposals, including the creation of a sovereign wealth fund for strategic independence as well as the creation of an expanded ministry of strategic sovereignty directly attached to the Prime Minister’s office.

François-Xavier Carayon is a graduate of Oxford and Warwick universities in anthropology, economics, political science, and philosophy. After teaching at HEC, he became a strategy consultant and continues to research.

Chronicle written by Michel GABET