Germany, Italy and France have called on the European Union to create an instrument to block foreign investors from strategic purchases of European technological advances, in a joint letter sent to E.U. Trade Commissioner Cecilia Malmström.
In the letter, obtained by Handelsblatt, the economics ministers from the three countries said they are concerned that sensitive European technological know-how could be purchased by investors from non-E.U. countries. Brussels currently doesn’t have any instruments to block such acquisitions, they said.
In a five-point list of suggestions, the economics ministers said Brussels should have the power to block acquisitions by state-backed investors or acquisitions that are part of a state program. These acquisitions could be blocked only if the investor seeks a significant stake in the target company.
There has been growing concern in Germany about acquisitions by foreign investors in the wake of the purchase of the robotics maker Kuka by the Chinese company Midea last summer. Germany has used its powers to block deals, such as with chipmaker Aixtron, but only on national-security grounds.
The paper does not specifically target China, but the ministers do write that foreign investors should only have the right to invest in the European Union based on the principle of reciprocity. This was not the case where the country of origin gives foreign firms only limited access to their own companies.
“Our companies are in a tough competition with countries, that themselves are not as open as Germany and Europe,” Matthias Machnig, a deputy minister in the economics ministry, told Handelsblatt, but stressed. “Germany is for open markets. We support the investment of foreign companies in Germany.