A three-nation call for the European Union to tighten foreign investment rules is worth considering, the European Commission said on Wednesday, amid worries about European technologies ending up in foreign hands.
Germany, France and Italy have sent the Commission a joint letter that urges the EU executive to re-examine the rules to allow them to block or impose strict conditions on deals involving public security and public order. The letter, seen by Reuters, said the EU executive could contribute its expertise.
“Ideas like the ones set out in the letter by Germany, France and Italy are worth discussing,” Commission spokesman Daniel Rosario told a daily briefing. He said the Commission shared their concerns on the limited access EU companies have to many foreign procurement contracts in contrast to the bloc’s open market for such deals.
EU governments have to tackle the issue, he said, adding any measure must comply with the bloc’s rules and international commitments.
Germany has been making protectionist noises since a spate of Chinese takeovers of German technology companies, among them Chinese technology home appliance maker Midea buying robot-maker and national champion Kuka which eventually secured EU approval after a preliminary review.
Another high profile deal involving Fujian Grand Chip Investment Fund’s bid for German chipmaker Aixtron was scuppered by a U.S. and German veto on security grounds. Chinese investors racked up deals worth more than $10 billion in Germany last year, about 40 times as much as in 2015, according to Thomson Reuters data.
A French economy ministry source said this joint initiative has been made possible by a change in Germany’s position on the matter, as the need for a level playing field for foreign investments in the EU has been long sought by France.
“Germany’s position has changed a lot since a raft of Chinese takeovers of German high-tech companies. They have realized they did not have any tools to protect their interests in this situation,” the source told Reuters.