On its last day of the Presidency of the Council of the European Union, France reached a provisional agreement on the evening of Thursday 30 June between the European Parliament and the EU Council on the proposal for a regulation to combat foreign subsidies that distort competition within the EU.
It has only taken 2 months and a few interinstitutional meetings (‘trilogues’) for the two EU institutions to come to an agreement on the text (see EUROPE 12945/18). This regulation is part of the toolbox with which the EU wants to quickly equip itself to defend its interests and combat unfair commercial practices.
The EU Council and the European Parliament held different positions on the thresholds above which companies carrying out a merger or acquisition must submit a notification for foreign financial contributions received. Negotiators eventually reverted to the figures that the European Commission had proposed in 2021 (see EUROPE 12711/9).
A European company therefore involved in a merger or acquisition, which has a turnover of more than €500 million and has received a financial contribution from a third country of more than €50 million in the last 3 years, will have to notify the Commission. MEPs were in favour of a threshold of company turnover of more than €400 million, while Member States were in favour of a threshold of €600 million.
Companies who are candidates for public procurement tenders of over €250 million must notify the European Commission of any financial assistance received in the last 3 years.
The provisional agreement maintains the European Commission’s proposal that it may adopt delegated acts to modify these notification thresholds if necessary.
However, the MEPs’ demand that the Commission take remedial action in instances of proven unfair foreign subsidies, was not accepted. The language of the Commission is maintained: it “may” take remedial action.
“With this new instrument, the message is clear to foreign companies: you’re welcome to the EU's internal market if you play by the rules. Those who do not play fair are left out. Re-establishing fair competition on the EU Single Market is not only important for the companies, but also to shore up support for global trade and open economies”, said European Parliament rapporteur Christophe Hansen (EPP, Luxembourg).
“This trilogue agreement on foreign subsidies is a major victory for the French Presidency of the EU Council and also the last one. Looking beyond the symbolism, this regulation is decisive for the future of our companies and our economic sovereignty”, said Stéphanie Yon-Courtin (Renew Europe, France).
The agreement still needs to be formally approved by the European Parliament and the EU Council before it enters into force. (Original version in French by Léa Marchal)