EU BEEFS UP PLAN TO VET FOREIGN DEALS
Governments likely to reach agreement by year-end on bloc-wide investment screening law
THE European Union (EU) may beef up a plan to screen foreign investments as China’s pursuit of acquisitions abroad fosters political unease in the bloc, according to a key EU lawmaker.
Franck Proust, a French member of the European Parliament, said the assembly and EU governments may reach an agreement by year-end on the first bloc-wide rules meant to prevent foreign direct investments from threatening national security.
Proust is leading the EU Parliament’s deliberations over an investment-screening law proposed in September by the European Commission, the 28-nation bloc’s regulatory arm.
The draft legislation needs more teeth to ensure Europe keeps strategic industries in its own hands, he said.
“It is timid,” Proust, who belongs to the Christian Democrats, the EU Parliament’s largest group, said in an interviewon Thursday, here.
“We want to be more ambitious and go very fast in the approval process.”
Concerns are mounting across the western world over nationalsecurity risks tied to foreign investment, particularly by China.
Last year, United States President Donald Trump blocked a Chinese-backed investor from buying Lattice Semiconductor Corp as a result of national-security worries and Germany moved to shield cutting-edge technologies after a bid by China’s Midea Group Co for robot maker Kuka AG prompted an outcry.
This Trans-Atlantic view contrasts with EU displeasure over Trump’s protectionist stance on trade, including a controversial plan to impose tariffs on foreign steel and aluminium, a position that has aligned Europe with China and highlighted global geopolitical cross currents.
In Europe, the question marks over Beijing’s policy intentions are compounded by its controversial Belt and Road Initiative to upgrade infrastructure worldwide, its Made in China 2025 plan to promote manufacturing prowess and a deadlock in talks on an investment accord to scale back Chinese market barriers for EU-based businesses.
Amid that stalemate, Chinese acquisitions in Europe have remained strong while European investment in China has fallen.
“The Chinese aren’t advancing anymore in hidden fashion, they are advancing openly,” said Proust. “There are strategic sectors where they want to be masters of the world by 2025. We know that.”
The draft European legislation would stop short of handing the EU the kind of decision-making clout over foreign investments enjoyed by the White House, reflecting the political sensitivity in Europe of encroaching on national sovereignty. Instead, the commission proposal foresees a combination of data collection, information exchange and peer pressure to create a European “cooperation mechanism” in this area.