Europe’s economic backbone is cracking: supply-chain resilience is now a security necessity

This IISS online analysis argues that resilient supply chains are no longer a technical or efficiency issue – they are the foundation of economic and national security. Pandemics, wars and export controls have exposed Europe’s vulnerabilities in global value chains, turning cost-focused systems into strategic liabilities. The debate is now about how much resilience is enough, and whether Europe can build it at the speed and scale the world’s geopolitical pressures demand. The risk is staring Europe in the face: weak supply chains are not an inconvenience – they are a direct threat to the EU’s economic security.

From efficiency obsession to strategic weakness

The piece shows how decades of optimising supply chains for speed and low cost have left Europe exposed. Systems designed around just-in-time delivery and concentrated suppliers may be efficient in calm periods, but they lack the buffers needed for shocks.

Pandemics and geopolitical conflicts have made it clear that when a single link breaks, the consequences spread fast and wide.

Weaponised interdependence is the new battlefield

Modern geopolitical tensions mean supply chains can be used as tools of coercion, not just commercial networks. Countries with dominant positions in key inputs or routes can put pressure on others by restricting exports or manipulating access to critical goods.

In this context, Europe’s current dependencies – whether in raw materials, technology inputs, or transport routes – are potential leverage points for rivals.

Mapping vulnerabilities is harder than it looks

One core challenge is that supply chains are complex and opaque. It is easy to identify direct suppliers but much harder to see risks deep in tier-2 and tier-3 links. Without that understanding, governments cannot anticipate where disruptions may hit next.

This structural blind spot leaves Europe reactive, not proactive, in the face of shocks.

Diversification and cooperation are touted – but Europe lags

The analysis points to diversification of suppliers and stronger cooperation among like-minded partners as part of the solution. Shared data, risk monitoring and joint industrial strategies can reduce exposure.

But current European efforts on these fronts remain patchy and slow compared with the pace of disruption. That means Europe remains vulnerable even as others strengthen their resilience.

The political cost of resilience is still controversial

Building supply-chain resilience is not free. It often requires trade-offs with efficiency, higher costs and reconfiguration of production networks. Some policymakers worry that pushing too far toward reshoring or protectionism could harm growth and open markets.

That tension between security and efficiency is at the heart of Europe’s struggle – and it forces hard choices about industrial policy that many member states are unwilling to make quickly.

Where this leaves Europe: resilience without strength is hollow

Europe knows supply chains are strategic, but it still struggles to turn that recognition into action. The EU’s economic security depends on networks it does not control and cannot quickly fix.

If Europe cannot build real resilience rather than pay lip service to the concept, its economic foundations will stay vulnerable – and rivals with more responsive systems will exploit that weakness.