For years, Western governments treated economic security as a supporting function of national security; it was important, but secondary. Defense ministries focused on military power. Economic ministries focused on growth. Trade policy, industrial policy, supply chains, energy resilience, and investment security often operated in parallel bureaucratic lanes connected more by process than strategy.
That model no longer reflects reality. Economic security is not adjacent to national security. It is increasingly national security.
In modern crises, markets often move before governments. Insurers reprice risk before policymakers issue statements. Shipping companies reroute before alliances coordinate responses. Capital hesitates before parliaments debate sanctions. Supply chains adjust before governments agree on strategy.
By the time governments align, the operating environment has already changed.
That reality is becoming increasingly visible across the transatlantic landscape. From the weaponization of energy and critical minerals to disruptions in maritime trade and growing competition over industrial capacity, the economic domain is no longer merely supporting geopolitical competition. It is one of its primary arenas.
The problem is not that democratic governments fail to recognize this intellectually. Most now do. The problem is that democratic systems still compartmentalize economics, industry, technology, and security into separate bureaucratic worlds while adversaries increasingly integrate them.
China certainly does not. Beijing integrates industrial policy, technological dominance, financial leverage, infrastructure investment, supply-chain positioning, and military modernization into a coherent strategic framework. Russia — despite its economic weaknesses — has demonstrated how energy, food exports, maritime pressure, sanctions resilience, and information operations can all be used to shape the strategic environment simultaneously.
Meanwhile, many Western governments still separate these functions across disconnected bureaucratic silos with different timelines, incentives, authorities, and risk calculations.
The result is a dangerous asymmetry. Authoritarian systems are increasingly organized to use economic instruments strategically. Democratic systems are often still organized merely to regulate them.
This challenge extends beyond governments themselves. The private sector now plays a central role in strategic outcomes, whether governments fully acknowledge it or not. A shipping insurer adjusting exposure classifications (in the Persian Gulf, for example) can alter strategic access faster than most alliance consultation mechanisms.
In a major crisis, shipping firms, insurers, cloud providers, semiconductor manufacturers, logistics companies, banks, and telecommunications firms become de facto strategic actors. Their decisions can accelerate or constrain national policy options in real time. This creates a fundamental shift in how strategic power operates.
For decades, Western policymakers tended to assume that governments shape markets during crises. Increasingly, the reverse is also true: markets shape governments.
That does not mean democratic governments are powerless. It means they must adapt faster to the realities of a more interconnected and contested operating environment. The uncomfortable truth is that many Western institutions remain optimized for deliberation in an era increasingly defined by speed.
That matters because strategic competitors have recognized something many democracies still struggle to operationalize: resilience, production capacity, logistics, data infrastructure, industrial depth, and technological ecosystems are now core components of deterrence.
Wars are no longer won solely by battlefield overmatch. They are sustained — or constrained — by industrial endurance, technological adaptability, and economic resilience.
Ukraine dramatically reinforced this lesson. The war exposed not only military realities, but also the importance of munitions production, energy resilience, sanctions coordination, shipping access, satellite services, repair capacity, and supply-chain sustainability. It revealed how quickly commercial technology and private-sector capabilities can become indispensable elements of national defense.
It also exposed the limits of Western surge capacity after decades of optimization around efficiency rather than resilience. That distinction matters enormously. Efficiency reduces cost. Resilience absorbs shock.
For years, much of the democratic world optimized for the former while assuming the latter would remain available when needed. Strategic competition is now exposing the flaws in that assumption. This is particularly important for alliances.
NATO was built primarily as a military alliance, but the underlying foundations of alliance credibility no longer rest solely on whether allies will fight together. Increasingly, it rests on whether they can produce, finance, transport, repair, and sustain together under pressure. The means to do so already exists; the alliance’s little-known Article 2 seeks to encourage and deepen transatlantic economic collaboration.
Credibility also requires a healthy and broad-based transatlantic relationship. What Washington sometimes treats as leverage, allies increasingly experience as vulnerability exposure. And in international politics, perceived vulnerability changes behavior quickly.
That dynamic is already reshaping Europe’s strategic thinking. The continent’s debates over industrial policy, strategic autonomy, critical minerals, digital sovereignty, energy diversification, and defense production are not occurring in isolation. They are part of a broader reassessment of systemic risk in a less predictable geopolitical environment.
This does not mean the transatlantic relationship is collapsing. Far from it. But it does mean that alliance management increasingly depends not simply on military commitments, but on whether democratic partners can build trusted economic systems capable of functioning under pressure.
That is now the real strategic challenge. The issue is no longer whether economics influences security. That debate is over.
The issue is whether democratic societies can organize themselves to operate at the speed of strategic competition — integrating governments, industry, finance, technology, and allied coordination quickly enough to preserve credible deterrence in an era where disruption travels faster than policy.
Economic security is no longer the rear area of national security. It is where crises accelerate, alliances are tested, and deterrence either becomes credible — or quietly fails.
The next strategic shock will not wait for democratic coordination mechanisms designed for a far slower era.
David M. Cattler is a Senior Fellow at the Center for European Policy Analysis (CEPA). He is a senior transatlantic security leader with more than 35 years of experience across the US government, NATO, and the Intelligence Community. Most recently, he served as Director of the Defense Counterintelligence and Security Agency (DCSA), and was previously NATO’s Assistant Secretary General for Intelligence and Security, the alliance’s senior intelligence official. Cattler is a graduate of the US Naval Academy and Georgetown University and was an MIT Seminar XXI Fellow.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
