The European Union will lose €367.8 billion after the adoption of the Cybersecurity Law Amendment 2 (CSA2). This estimate is presented in a joint report by the China Chamber of Commerce and Industry to the EU and consulting firm KPMG.
If the EU tightens regulations and eliminates Chinese technology suppliers in 18 critical sectors, the cumulative losses for EU member states over five years will amount to €367.8 billion. This amount is equivalent to almost two years of the EU budget. The damage will affect sectors such as energy, telecommunications, financial infrastructure, logistics and manufacturing, public services, as well as healthcare and research.
The report's authors estimate that direct losses from equipment replacement, dismantling and asset write-offs will amount to 40%. They estimate that social losses, including reduced economic efficiency and delayed digitalization, will reach 28%. Reconstruction of technological systems and reallocation of resources will account for 22% of the losses, while legal costs related to dispute resolution, recertification and compliance with regulatory requirements will account for 10%.
Costs in the energy sector could reach EUR 79.9 billion, in telecommunications - EUR 57.4 billion, and in logistics and production - EUR 114.6 billion.
The report predicts a gradual increase in annual losses: EUR 39.1 billion in 2026, EUR 55.1 billion in 2027, EUR 93 billion in 2028, EUR 91 billion in 2029 and EUR 89.6 billion in 2030.
According to the authors of the report, the amendments to the law do not take into account the differences between EU Member States in terms of industry, fiscal capacity and readiness for digitalisation. The result will be highly asymmetric economic losses. Germany (EUR 171 billion), France (EUR 46 billion) and Italy (EUR 37 billion) will bear the brunt.
Amendments to the Cybersecurity Act
In January, the EU presented proposals for amendments to the Cybersecurity Act. The document establishes rules to protect IT supply chains and allows for restrictions on the use of technology and equipment by suppliers in so-called high-risk countries.