The european Union wants to arm themselves against the chinese competition

Photo: Kenzo Tribouillard Agence France-Presse
The european Commissioner for economic Affairs, Thierry Breton, at his press conference on 17 June in Brussels

China in the line of sight, the EU has presented on Wednesday his plan to better protect businesses from unfair competition from foreign groups, a risk accentuated by the crisis caused by the sars coronavirus.

This enhanced protection is particularly claimed by France, Germany, but also by the very liberal netherlands, themselves the victims of recent a chinese offensive on a call for tender for buses.

“The problem is that our european businesses are penalised for having complied with the rules, while companies in China and other third countries benefiting from public funding excessive,” said the european Commissioner for economic Affairs, Thierry Breton, at a press conference in Brussels. So, the EU has decided to go on the offensive. “It sends a clear message to the rest of the world : “You are welcome, but here are our” rules “, stressed the ex-French minister of Economy and former head of the French group, Atos. A reminder all the more important, he added, at a time when the EU negotiates an agreement with the United Kingdom on their relationship post-Brexit and fears that arise in an economy that is deregulated at his door.

New instruments

With the executive vice-president of the Commission, responsible for Competition, Margrethe Vestager, Mr. Breton has presented in Brussels a white paper, which should be followed in 2021 by a legislative proposal.

A public consultation will be launched until the 23rd of September, to help the eu executive to prepare for these new instruments.

In its white paper, Brussels has proposed a number of solutions.

First : if it is proven that a foreign company that is subsidized has a negative impact on competition in the european market, the national authorities or the Commission could impose measures.

It would, for example, require on the part of the foreign company, compensation payments, or to ask him to sell certain assets, or even to let its rivals have access to its infrastructure, or the results of its research.

Second : the Commission wants to prevent that from foreign firms, largely financed by States, do not buy european societies in fragile or acquire a significant shareholding in their capital. From a certain amount, that the threshold is not decided yet, foreign companies will have to notify the acquisition to the Commission.

If it believes the competition in danger, it could prohibit the acquisition.

Thirdly : the eu executive also intends to intervene when a foreign company largely subsidised risk of winning a tender for a public contract within the EU at the nose and the beard of european companies, by offering a price much more advantageous.

Reciprocity requirement

Brussels is proposing that these foreign companies shall notify in advance the aid which they receive from their State. And if it is found that such aid distorts competition, the foreign company could be excluded from the tender. This will be the national authorities who will carry out a prior control. The european Commission will intervene as a last resort, especially in the case of large infrastructure projects.

In the Face of the subject of predatory strangers on their nuggets national, some member States have taken the lead : no later than Monday, Berlin has decided to become a shareholder of the German biopharmaceutical CureVac, well placed in the race toward a vaccine against the coronavirus, to prevent its purchase by a foreign investor, particularly american.

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