EU steps up fight to fend off risky foreign takeovers

Brussels, Feb 8 (AP): The European Union is successfully stepping up the fight to fend off risky foreign business takeovers from nations like China that could endanger national security or threaten control over essential sectors like energy, transport and health car.

EU steps up fight to fend off risky foreign takeovers

Brussels, Feb 8 (AP): The European Union is successfully stepping up the fight to fend off risky foreign business takeovers from nations like China that could endanger national security or threaten control over essential sectors like energy, transport and health care.

The unprecedented legislation creating a new area of coordination in the 27-nation EU makes the bloc much better equipped to protect strategic homegrown businesses, a top French official said.

“We've really woken up to the need to protect our security and our public order,” Marie-Anne Lavergne, who heads the office at the French Treasury in charge of the control of foreign investments in France, told a European Parliament hearing on Monday. “It's very positive.” In October 2020, after three years of deliberations, the EU put in place a bloc-wide “cooperation mechanism” for screening foreign direct investments, or FDI. The European law seeks to limit foreign threats to “critical infrastructure,” and to “critical technologies” such as semiconductors and robotics.

The legislation reflects a broader EU push to assert more geopolitical weight amid heightened U.S-China tensions, renewed muscle-flexing by Russia and greater regional assertiveness by Turkey, among other things.

Also high on the EU's policy-making agenda is a plan for new powers to counter possible “economic coercion” against the bloc and an initiative for ramping up domestic production of microchips amid a global shortage.

The new EU legislation on screening foreign investments emerged after increased political unease across Europe about Chinese acquisitions abroad. It got further momentum from the COVID-19 pandemic, when EU nations became wary of domestic biotech companies getting snapped up by overseas buyers.

While the EU remains one of the biggest and most open markets for FDI, the law's goal is to deter investments that may be driven by more than purely commercial considerations and influenced by foreign governments.

“The EU has become aware of its vulnerabilities with respect to investments of this type,? said Nathalie Loiseau, a European Parliament member from France. “Far from being naive, the EU decided to find a balance between maintaining openness in principle to FDI and reinforced vigilance.” The new European rules are a compromise between EU countries' jealously-guarded sovereignty over security matters and an awareness that, because of Europe's integrated market, a foreign investment in one member can have repercussions for other states in the bloc.

Without taking the ultimate power of approving deals away from individual EU nations, the European legislation effectively creates an alert mechanism for investments in the EU by actors based anywhere outside the bloc. The law does so through data collection and exchange.

EU governments are allowed to request information and offer comments on a foreign investment in a particular member country. In addition, the European Commission, the bloc's executive arm in Brussels, has the right to ask for information and issue an opinion.

“The EU is on a right track when it comes to these policies,” Wolfgang Niedermark, a member of the executive board of the Federation of German Industries, told the hearing. “There is systemic rivalry. It's gaining momentum. It matters for our security." (AP) ANB ANB

(This story is published as part of the auto-generated syndicate wire feed. No editing has been done in the headline or the body by ABP Live.)