This research note investigates the causes of the 2024-2025 reform of the European Union’s foreign direct investment screening framework by probing two competing explanations: “failing forward” (Jones et al., 2016, 2021) and “muddling through” (Lindblom, 1959). We show that the 2019 Regulation (EU) 2019/452 was a deliberate lowest-common-denominator outcome whose design gaps were apparent from adoption. We structure our analysis around three dimensions: the nature of the crisis catalyst; institutional lock-in and path dependence; and the seeds of the next failure embedded in the new Regulation (EU) 2026/1386. We argue that the reform is better characterised as “muddling through” than as “failing forward:” triggered by a mandated statutory review and exogenous geopolitical shocks rather than by an endogenous governance crisis, the new Regulation (EU) 2026/1386 reproduces the core sovereignty constraint of 2019, with the Commission obtaining no override powers. We discuss the implications for economic security governance more broadly.