EU warns virus could expose firms to foreign buy outs

European Commission President Ursula Von Der Leyen [Stephanie Lecocq/EPA/EFE]

The head of the European Commission warned Wednesday (25 March) that the economic aftermath of the coronavirus could leave strategic private sector firms exposed to foreign takeovers.

In her daily video message, Ursula von der Leyen said the European economy would continue to welcome foreign direct investment, but must “protect our critical assets and technologies.”

“The coronavirus crisis affects deeply the European economy, and many companies are temporarily weakened by this crisis, we need to take care of them,” she warned.

“Some sectors are key for security, public health and serenity, such as health, medical research or strategic infrastructure,” she added.

The EU chief has previously said Brussels intervened with a loan to help a German firm working on a possible coronavirus vaccine that had reportedly attracted interest from US investors.

EU offers support to German vaccine company coveted by Trump

The European Commission said on Monday (16 March) it offered up to €80 million of financial support to German company CureVac to scale up development and production of a coronavirus vaccine in Europe.

Von der Leyen urged EU member states to screen potential outside investors carefully, and said Brussels would issue refreshed guidelines.

“To those member states that do not have such a mechanism, I tell them now is the time to create it,” she said.

“In the meantime, you should use all options to protect critical European companies from foreign takeovers or influence that could undermine our security and public order.”

On Wednesday, the Commission issued guidelines to ensure a strong EU-wide approach to foreign investment screening in a time of public health crisis and related economic vulnerability.

EU leaders will hold a video summit on Thursday to better coordinate their response to the global epidemic.

Europe has become the epicentre of the COVID-19 pandemic with Italy the most affected country in the world, followed by Spain.

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