The European Commission on Wednesday announced a new law to prevent government-subsidized foreign companies from merging and competing unfairly in the EU, a move that is seen as aimed at preventing China.
The European Commission on Wednesday proposed a new regulation to address competition problems of foreign companies receiving government subsidies, hoping to provide the right conditions for European industries to flourish by promoting fair competition.
Europe is a big country open to investment, but openness needs to be fair, said Margrethe Vestager, the European Commission’s executive member in charge of competition. When you open your own home to guests, you want them to be as careful with their furniture and belongings as you are,” she said. And that’s what the European single market is all about.”
The EU wants every company operating in Europe, no matter where it comes from, to comply with the protection of fair competition without distorting the market, and today’s new law is meant to address distorting subsidies provided by non-EU countries, Vestager said. A good level playing field is particularly important to support the recovery of the EU economy.
EU Executive Commissioner for Industry and Services Breton (Thierry Breton) also said that the European single market is attractive to foreign investors and companies. But openness to the world is only effective when everyone plays by the rules.
Breton further said that the EU is ensuring that all companies compete on an equal footing and that no one can undermine the level playing field and Europe’s competitiveness through distorted foreign subsidies. This will enhance Europe’s ability to resist.
Under new EU regulations, companies that receive foreign subsidies will need to obtain EU approval before undertaking large mergers in Europe. Companies must indicate which subsidies they receive and cannot take public tenders without the EU’s consent.
In addition, the EU will further have the power to investigate any company that receives foreign subsidies that undermine fair competition in Europe.
Although the EU text does not name China, but according to the Central News Agency, citing the German “Süddeutsche Zeitung” recently reported that the European Commission proposed legislation to prevent foreign companies receiving government subsidies from merging with EU companies or participating in EU public tenders, apparently for Chinese companies.
The newspaper noted that in recent years, more and more EU countries are worried about Chinese companies using generous government subsidies to acquire cutting-edge technology in Europe and fight against European competitors under official leadership.
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