A panel of experts in the European Union will evaluate a new screening tool. It could put an end to plans by European companies to announce and produce sensitive technology in countries like China and Russia.
On Tuesday, the European Commission presented the first draft of Financial security strategy.
Since the European Union was founded on free trade, it was important for both President Ursula von der Leyen and Trade Commissioner Valdis Dombrovskis to stress that multinationalism remains part of the EU’s DNA.
But with the pandemic, the Russian invasion of Ukraine, and the US-China industrial race as a backdrop, the committee sees the need to tighten its grip.
– offended
Not only will the Union strengthen the work with the tools already in place, such as export control and inward FDI screening, but it will also consider a new tool:
Examining the investments that European companies will make in countries such as China and Russia – although no country is explicitly mentioned in the strategy.
– Von der Leyen said during the press conference that we must ensure that European companies’ capital, knowledge, expertise and research are not misused by countries for military use.
She stressed that it will be applied to a limited set of technologies that can be used in an “aggressive manner”, whether it is artificial intelligence or advanced chips.
And now the Commission will create an expert group that will include people from many of the 27 EU member states, which will identify the security risks inherent in such “foreign investments”.
The plan is for the committee to provide details of what this tool will look like at the end of the year.
to caution
Reviewing and possibly stopping corporate investments in this way was referred to as something entirely new by many in the agency’s administration on Tuesday.
But something similar It is also on the road in the United States. Moreover, it is also happening before in countries like South Korea and Taiwan.
Businesses are skeptical of this procedure, and according to the organization Business Europe own it Politico It was clear that it should be carefully evaluated and only used as a last resort if it can be shown that serious safety issues may arise.
EU foreign affairs chief Josep Borrell, trade commissioner Dombrovskis and competition commissioner Margrethe Vestager all weighed their words carefully when they answered questions from the press on Tuesday.
– We have to be very careful in how we proceed so as not to have a chilling effect on investments. Especially at a time when you just need a lot of investment, says Vestager.
– Dombrovskis said that the European Union is one of the most attractive destinations for global companies and investments, before adding that the economic security measures proposed by the Commission will be proportionate and accurate.
The Commission is also balancing on a knife edge when it comes to who should have the authority to make decisions about export control and inspection, whether it should fall to the EU centrally or in each individual member state.
The report indicated that many member states indicated that they wanted to keep the power themselves uractive.
– No protectionism
The strategy put forward by the Commission on Tuesday is part of a series of measures as the EU tries to bring industry and technology back to local regions, and make itself less dependent on other countries.
EU Foreign Affairs Officer Borrell illustrated the need, among other things, with a story that the EU came to realize during the Covid pandemic that not a single gram of paracetamol was produced in Europe.
However, he is keen to stress the following, when the Commission now presents a strategy for financial security:
It is critical that our partners understand that this is not a protectionist move. This is not the case, Borrell said, before emphasizing that this strategy will help shape the EU’s foreign policy in the coming years.
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