EU wants to tackle public procurement ‘imbalance’ with foreign countries

Commission: "All competition investigations by the European Commission are based on the facts and the law and not on other considerations." [EU2016 NL/Flickr]

The European Commission has raised concerns about the limited access EU companies get to public markets abroad, proposing measures to tackle the “imbalance”.

The issue of “aggressive” foreign takeovers by foreign state-owned companies was raised by Germany last October when Chinese home appliance maker Midea bought German robot maker Kuka and chipmaker Sanan acquired Optoelectronics.

In reaction, the German economic ministry proposed lowering the thresholds for controlling mergers at national level in order to supervise the acquisition of EU companies owning key technologies or infrastructures.

Germany considers protecting firms from foreign takeovers

The German Economy Ministry wants to protect high-tech companies in Germany from unwanted takeovers, especially from state-owned and partly state-owned companies in non-European countries, a German newspaper reported on Sunday.

Amid growing pressure to shore up the digital future of European industry, Berlin, Paris and Rome sent a letter to EU Trade Commissionner Cecilia Malmström in February, asking for “more scope to investigate individual takeovers and, where applicable, block them”.

The EU’s most powerful economies argued the EU should boost its capability to protect public interests more efficiently based on economic criteria in the event of takeovers by foreign investors, especially those eyeing hi-tech and strategic infrastructures.

Commission says proposal to block Chinese takeovers is 'worth discussing'

The European Commission welcomed Germany, France and Italy’s proposal to halt China’s buyouts in Europe in some cases given the “limited access” to the Chinese market.

Fresh transatlantic spat

The discussion recently heated up in the Netherlands when Dutch paints and coatings maker Akzo Nobel rejected a second takeover bid from US rival PPG Industries worth €22.4 billion.

As part of a wave of mergers in the chemical industry field, the Commission last week (27 March) approved a $130 billion merger between Dow Chemical and DuPont, two of the oldest US chemical producers.

The Dutch multinational hinted that such a takeover would deal a severe blow to the country’s national interest, so there was no governmental political support for it.

The head of the company reportedly said that due to lack of political support from the Dutch government, Brussels would be sceptical about the proposed takeover.

“As a general rule, any initiative at EU level would have to be compatible with the EU Treaties and the EU’s international commitments,” a European Commission spokesperson told “All competition investigations by the European Commission are based on the facts and the law and not on other considerations,” the official added.

Commission concerns

The official said the EU executive needs to regularly assess whether it has all the tools to respond to the changing landscape of globalisation.

“In this context, ideas like the ones set out in the letter by Germany, France and Italy are worth discussing,” the EU official noted.

According to the EU spokesperson, the Commission fully shares the concern regarding the limited access that EU companies have to a number of third countries’ procurement markets as compared to the openness of the EU procurement market.

“An agreement needs to be reached at EU level about how to tackle these imbalances: the Commission made in January 2016 a revised proposal for an International Procurement Instrument, which would offer the EU an instrument to improve access to third countries’ procurement markets,” the executive said.

Referring to the ongoing trade and investment negotiations, the official emphasised that the EU aimed at opening up new markets for EU investors and ensuring a level playing field.

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