In a debate moderated by Friends of Europe on the European Foreign Direct Investment screening mechanism, on Wednesday 6 May, Maria Martin Prat, Director at the European Commission's DG Trade, highlighted the progress made in recent weeks by the EU27 to protect their critical European infrastructure.
The European Foreign Direct Investment screening mechanism, planned for October 2020, relies mainly on the good will of Member States, encouraging them to cooperate and share information. To date, only about 15 Member States have introduced them, and they are not harmonised – a situation that worries some in the EU.
During the debate, Elvira Fabry, from the Jacques Delors Institute, encouraged the Union to strengthen its system. In a recent policy paper, the researcher expressed concern that the weakening of European companies, brought on by the Covid-19 crisis, could increase opportunities for corporate takeovers at bargain prices in the EU.
But the Commission wants to see the glass half full, pointing to the progress made by some more reluctant countries. Member States are increasingly aware of the importance of this process, she said, and 14 countries are considering creating or improving their mechanisms, including in those traditionally more reserved countries.
Moreover, since the Commission encouraged Member States on 25 March to speed up the implementation of mechanisms to protect these strategic assets, in particular in the field of public health, cooperation between the EU and the 27 Member States has been stepped up, she also noted, in order to draw up a Europe-wide map of acquisitions of infrastructure deemed “critical” (see EUROPE 12468/16, 12455/22, 12466/7).
The definition of these critical infrastructures is in a state of flux, Martin said. In essence, a single aggressive acquisition of a company in one Member State can break a whole supply chain in the Single Market. Read the Delors Institute's document: https://bit.ly/2L8rZM1 (Original version in French by Hermine Donceel)