European lawmakers agreed on Thursday to give the European Union new powers to better monitor foreign investment and prevent their state-subsidized companies from unfairly competing on the continent. Once this mechanism is in place, it will enable the European Commission to investigate “any economic activity that benefits from a subsidy from a third country in the domestic market”.in particular, in the case of an attempt to take over a European company or in the context of tenders for a public contract, the EU Council elaborates in a press release.
This tool will be used for the largest merger-acquisition operations starting at €500 million and for offers in the context of large-scale public contracts, i.e. above €250 million. In addition, the Commission will have the right to investigate subsidies granted before the entry into force of the regulation up to five years ago and distorting the internal market after its entry into force.
In case of non-compliance with European legislation, it can impose fines and, if necessary, enforce them “accept corrective measures or commitments from the companies concerned to eliminate the misstatements” the competition, according to the press release. This text is the result of an agreement between members of the European Parliament, the European Commission and negotiators from France, which until Friday presides over the six-month rotating presidency of the EU.
“The agreement reached on this new instrument will make it possible to fight against unfair competition from countries that provide huge subsidies to their industry. This is a big step towards protecting our economic interests.”welcomed the Minister of Economy of France, Bruno Le Marie, who was quoted in the press release.
The provisional agreement reached on Thursday still needs to be approved by the Council and the European Parliament. However, if given the green light, this instrument would not enter into force until mid-2023, given the time needed for commission staff to deal with its new responsibility.
Source: Le Figaro
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