The European Commission is working to convince skeptical member states to support stricter economic safeguards on outbound investments as a measure to protect European interests. The measures include a new system to scrutinize investments and an updated system to control exports of highly sensitive technology.
Commission president Ursula von der Leyen told reporters that “the world has become more contested and geopolitical and there is a limited set of key technologies that can be used in a different and in an aggressive way.” The EU will still be in favour of open trade but it needs new safety measures.
Despite the Commission’s will, member states are being reluctant on the issue. Germany and France are reluctant to go too far with protectionist measures, due to their trade and business relationship with China. Also the Netherlands have doubts over the proposals, with enterprise minister Liesje Schreinemacher telling the FT that the screening process for outbound investment is “a very heavy instrument” and seeks reassurance from Brussels on the why the commission is pushing for it. The Dutch minister added that it should be limited to some sectors, like ports, telecommunications and healthcare.
According to Reuters, one EU diplomat commented that member states’ government had “a relatively unenthusiastic response” to the proposals. They agreed on the need for a clear framework, but at the same time want to be cautious about the issue. The trade commissioner Valdis Dombrovskis reassured that the new system will be targeted and narrow in scope. EU leaders will talk about the proposal at the next European Council.
