The crises follow each other but are not alike.
Economic crisis, ecological crisis, migratory crisis and henceforth health crisis … It is not new but now recognized that it will be necessary to regain control over certain strategic assets, particularly in the health sector. But what will be the point of relocating companies to French territory if the strings are pulled from Beijing or Washington? To this often forgotten question, there are answers in the form in particular of the prior authorizations of foreign investments or filtering mechanisms.
Our European economy is suffering badly and many companies will fight for their survival and those of their jobs. As a result, many investors will be able to take shares in companies in difficulty and there is no doubt that this need exists and remains paramount.
However, a well-known phenomenon is likely to be amplified: that of foreign investments which aim to control strategic companies or technologies as well as our know-how. Their political origin is no longer to be demonstrated since China has made the mistake of including it itself in its China Manufacturing Plan 2025, the Chinese bible of industrial strategy. Even the very liberal European Commissioner for Competition, the Danish Margrethe Vestager, has raised the risk that vulnerable companies will be the subject of a takeover, notably Chinese.
Mechanisms. Rest assured, some front-line states are already vigilant thanks to investment filtering mechanisms such as France or Germany. Faced with the voracious appetite of companies supported by illegal state aid, Germany has strengthened its mechanism three times in three years! However, only 15 out of 27 European countries have such a mechanism. However, the States must decide to create their mechanism: this is now a necessity in order to fill the holes in the European shield.
Indeed, Europe is not to be outdone since in October the first European investment filtering mechanism will come into force. The coronavirus crisis will be its first full-scale test. It will allow member states to share information about strange and especially foreign investments, under the watchful eye of the European Commission, which will take care to preserve European projects and programs whose scope is strategic.
Without hampering competition between companies, this tool is the defensive weapon of the European Union and of States to protect its order, its public security and ultimately its sovereignty.
The urgency of the situation for our strategic assets means that we cannot wait until October and that the member states that have the capacity to exchange information on investments taking place on their territory now. Trade ministers wishing to go in this direction, will the Ministers of the Economy who often control this tool really do it?
European added value also lies in its ability to thwart strategies that take advantage of the individuality of states to weaken them. When we have understood, politicians, citizens, decision-makers that the world around us will always benefit from our divisions, then we will manage to come together and impose ourselves despite the Coronavirus crisis.
Franck Proust is vice-president of the European People’s Party (EPP), former MEP and rapporteur on the screening of foreign direct investment.