Europe is open but not naive, the European People's party said. It was speaking after a vote in the Parliament's International Trade Committee on the Instrument against distortive Foreign Subsidies (IFS).
With this new instrument, the EU's internal market remains open to anyone who plays by the rules. "Those who do not play fair are left out. Re-establishing fair competition on the EU Single Market is not only important for the companies, but also important to restore the faith of all Europeans in the virtues of global trade", said Christophe Hansen, MEP, and the European Parliament's Chief Negotiator of the new law.
Members of the European Parliament proposed that mergers or investments that involve a threshold of €50 million in foreign subsidies or more for companies with a yearly turnover of €400 million must be notified to the European Commission where non-EU entities acquire control over EU entities.
The same applies to public procurements exceeding €200 million if foreign subsidies are involved. Mirroring EU competition rules, mergers, foreign investments and biddings could be forbidden or granted under conditions like in EU internal procedures. If a merger or investment concerned is not notified, fines may apply. The Commission could also open procedures ex officio if suspicions emerge.
"With this instrument, we are ensuring that the strict competition and state aid rules for European companies also apply to competitors that receive subsidies from abroad," Hansen explained.
"If foreign companies want to take control of European companies or participate in European public procurement, the European Commission has to ensure that they operate under similar conditions as European companies which have to stick to a strict state aid regime", he added, stressing that longstanding regulatory gaps need to be filled.
As Chief Negotiator, Hansen wants to introduce a third country dialogue into the instrument in order to prevent the misuse of the IFS for protectionism. "Overall efficacy of the instrument has been my guiding compass. Protectionism would be enormously damaging to our economy, which operates globally", he added.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about msatters that affect their daily lives. This article reflects only the author's view. The European Parliament is not responsible for any use that may be made of the information it contains.
