February 27, 2021

The European Parliament approves the mechanism to control foreign investment in key sectors | Economy

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The European Parliament approved on Thursday the creation of the mechanism for Control foreign investment in strategic sectors of the countries of the EU. Faced with the threat posed by the emergence of Chinese public capital in the continent, the European Parliament has given the green light that Brussels can launch a monitoring system on acquisitions of infrastructure companies, defense, energy, media or data storage . The Commission it will be able to prepare opinions on these operations, although the capitals will have the last word.

The creation of this tool has been adopted by the Chamber by 500 votes in favor, 49 against and 56 abstentions. After its approval, the Council is expected to give its final approval on March 5. Now only 14 member countries have a tool to subject foreign investments to scrutiny, although most of those systems are very limited

This mechanism establishes three routes and determined deadlines for Brussels to issue an opinion on an investment made by a country outside the EU. The first comes from the country where it is carried out: a State communicates a major operation, its amount, the company's corporate structure and the partners that could be affected. In this case, the Commission will issue an opinion and, if one third of the injured countries so request, another one.

The second intervention formula is provided in case the country receiving the investment says nothing. If a State that believes itself affected requests it, the community executive may assess it. And the last way is the ex officio action in case of programs of interest to the Union or in which European funds may be involved. The capitals will always have the last word, but parliamentary sources maintain: "They can not say they are not warned." In addition, these same sources also emphasize the dissuasive effect that an unfavorable opinion of Brussels can have for an investor.

The mechanism, which should be ready in 18 months, comes at a time when Chinese investment is at the center of the community debate. France and Germany fear that the inflow of capital from that country may mean a technology transfer from Europe to Asia or that companies backed by Chinese public capital will be left with "key" infrastructures that affect "security or public order", as it says. the approved text.

Sectors of special vigilance

Germany, in fact, had to veto the purchase of biotech Aixtron and has approved a mechanism that allows it to block acquisitions of even 10% of the capital of key companies. "The Europe that protects It is a reality. This mechanism is a concrete step against threats to our industries, technologies and strategic interests, "said Franck Proust (Popular Party), the deputy who negotiated the text.

After the Brussels veto of the merger of Simens and Alstom, who wanted to light up a railway giant, Competition Commissioner Margrethe Vestager already indicated that the EU partners could use this instrument to protect their strategic infrastructures. But it also comes at a time when the Commission has expressed its concern about the activity in Europe of the Huawei telephone company. The commissioner of Commerce, Cecilia Malstrom, affirmed that the "legislation is totally neutral and does not discriminate", although she admitted that "nobody escapes" that there is "an issue regarding China".

The European Parliament went beyond the Commission by expanding what it considers to be special surveillance sectors. Among these will be energy, transport, finance, technologies, defense companies or biotechnology. However, the misgivings of several countries towards the Russian media expansion caused several Eastern European MPs to also request the inclusion of the media or the storage of data, as EL PAÍS advanced.

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