Brussels, 15/05/2014 (Agence Europe) - On Thursday 15 May, EU Internal Market Commissioner Michel Barnier recognised that member states should be able to protect their strategic industries, but said any such national measures had to be proportionate.
Barnier said the Commission would be closely examining a new French law to see whether it complies with European Court of Justice case law. He said the legitimate aim of protecting strategic sectors to ensure public order and security was recognised in the European treaties, but the Commission would be verifying whether the measures were justified and proportionately applied for the protection of public order and security and did not include provisions so vague that they amount to economic protectionism.
On Wednesday evening, the French government extended a 2005 law that makes some types of foreign investment in France subject to public approval, adding the following industries to the list: energy and water supplies, the running of transport services and networks, electronic communications and the protection of public health. The law was extended as the French government is examining the merger talks in which US company General Electric has made a bid for French company Alstom's energy business. France wants to intervene in the case, and is reported to want a European company, such as Germany's Siemens to take over Alstom, but Siemens has not yet made any official bid.
In April 2006, the European Commission opened infringement proceedings against France's 2005 law (see EUROPE 9167) and the proceedings were closed after France made a number of adjustments. The case was over the fact that the law applied to investment in a company which only had a small share of its turnover in businesses relating to public order and national defence. Along with railways, Alstom makes a smaller share of its turnover from the manufacture of turbines for French nuclear plants.
Barnier said a dozen member states, including Germany, Spain, France and Italy, had introduced measure to defend strategic industrial interests but the measures in question had not been used much. Preferring a boost in investment to a boost in protectionism, Barnier recommended the establishment of a foreign investment monitoring centre in order to determine which non-EU countries are investing in which industries in Europe and to prevent conflicting or overlapping national solutions, an idea mooted by Industry Commissioner Antonio Tajani back in 2011 (see EUROPE 10285). (MB)