EU countries welcome push to curb foreign takeovers

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13 Sep, 2017

EU countries welcome push to curb foreign takeovers

France, Germany and Italy have welcomed a proposal by EU commissioner Jean-Claude Juncker to limit China’s ability to buy up European companies in infrastructure, manufacturing and energy.

Juncker presented proposals for an investment screening framework in his State of the Union address. The goal is to give EU member states a tool to intervene in cases of foreign direct investment in strategic assets, in particular if carried out by state-controlled or state-financed enterprises.

“Germany, France and Italy firmly welcome the Commission’s proposals as an important step towards a level playing field in Europe,” a joint statement published by the German Economy Ministry said.

Germany’s Economic Affairs Minister Brigitte Zypries said Berlin expressed interest in foreign investment when it took place under market conditions.

She added: “But we need to prevent other states from taking advantage of our openness in order to push through their industrial policy interests.”

Juncker’s proposals would attempt to ensure fair competition in the EU while offering better protection against company takeovers that do not comply with market rules, she said.

“In future, the member states will have clear powers to intervene in the case of state-controlled direct investment in European companies,” Zypries said.

French Economy Minister Bruno Le Maire said the EU proposal needed to be complemented by further work to ensure reciprocity in public procurement and more widely in all EU trade relations.

Last June, French President Emmanuel Macron urged the Commission to come up with a system for screening investments in strategic sectors from outside the bloc.

In July, Germany became the first EU country to secure its laws on foreign corporate takeovers following a series of Chinese deals giving access to Western technology and expertise.

France has already implemented national legislation in place to block such deals in specific sectors such as energy and telecoms.

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