Meeting in plenary session on Thursday, 14 February, in Strasbourg, MEPs supported the establishment of an instrument to control foreign direct investment (FDI) in the European Union by a large majority (500 votes in favour, 49 against, and 56 abstentions) so that Member States can better protect their strategic assets from hostile takeovers (see EUROPE 12141).
“This is not a protectionist measure [...] and it is not a way for the Commission to tell Member States what investments they should or not accept, but an important new tool [...] for a collective capacity to respond to the challenges that have arisen because of globalisation”, Commissioner for Trade Cecilia Malmström had told MEPs during a debate the day before.
Few dissenting voices were heard during this debate. MEPs pointed out in turn that the EU was remaining open to FDI, while warning against pernicious investments, with more or less direct allusions to China.
The new regulation establishes a legal framework for screening new FDIs in the EU in order to protect its critical infrastructures. These include energy, transport, communications, data processing, space, electoral and financial infrastructures, and key technologies, including semiconductors, artificial intelligence, and robotics. Negotiators from the European Parliament added sectors such as water monitoring, health, defence, media, biotechnology, and food security.
A new area for the EU
For the European legislator driven by the operations of foreign investors in the European single market, the aim was to clear a new legal field by finding several balances: between the role of the Commission and that of the Member States, between protection and protectionism, and between the confidentiality of information and the relevance of its content. All this in order to define – at the EU level – a clear picture of FDI, collectively assess the challenges to public security, and perhaps manage the risks.
“A Europe that protects has become a reality”, stated Franck Proust (EPP, France), the European Parliament’s rapporteur on this issue, on Thursday after the vote.
Not applicable until September 2020
Negotiations were swiftly conducted after the project was launched in September 2017 at the express request of the European Council (see EUROPE 11862).
The Council is expected to formally approve the agreement on 5 March. Italy’s reluctance – despite the fact that it initiated this mechanism with Germany and France – is not expected to have any impact on this vote. As all MEPs from Movimento 5 Stelle and Lega abstained from voting in plenary, Rome will probably abstain in the Council. The final text will therefore also be supported by a comfortable qualified majority of Member States.
Nevertheless, at the Council’s request, the regulation will only enter into force 18 months after its publication in the Official Journal.
This transition phase will allow the Commission to set up the mechanism with the Member States, explained Mrs Malmström. (Original version in French by Hermine Donceel)