The European Union (EU) plans to fight the effects of hostile rivals trying to take over businesses vulnerable after the coronavirus pandemic, the Associated Press (AP) reported.
The move, announced on Wednesday (June 17), is aimed at the influence of China in the bloc’s single market, which has seen “distortive effects” of foreign entities facilitating takeovers of European businesses, the EU said.
With European businesses working under stricter state-aid rules, other companies could come in and invest large amounts, winning public procurement tender. The EU’s vigilance is intended to prevent hostile takeovers of businesses that have been affected by the pandemic.
European Commissioner for Internal Market Thierry Breton said at a press conference that while everyone was welcome in the EU, he also wanted to see companies playing fair and respecting the rules.
Under the new plan, the EU would create a general market tool to help identify what situations foreign money could cause distortions in, establishing a new board to use discretion in those matters. The proposals would also ask that businesses receiving support from outside the EU notify the authorities whenever they buy an EU product, with transactions not final until approved by the commission.
Bidders will have to notify contracting authorities of any non-EU financial contributions under the proposed plans.
EU lawmaker Manfred Weber, chairman of EU Commission President Ursula von der Leyen’s center-right European People’s Party, said that what was needed was further action, in the form of “legislative proposals to prevent outsiders from buying our strategic companies and know-how at a bargain price,” according to the AP.
The EU said its plan is open for public comments until September, before legislative proposals will be considered by the parliament and member states.
The EU has also put together a new unit to target financial crime, which has increased during the pandemic, intending to fight the large amounts of fraud and money laundering spurred by those taking advantage of the chaos.