EU to tighten foreign investment control amid rising threats, reducing reliance on China
The European Commission is seeking more comprehensive oversight of foreign investments in the EU and enhanced coordinated control of export and technology outflows from the Union.
Various threats prompted this proposal, reports Reuters. These threats include the coronavirus pandemic, Russia's assault on Ukraine, cyber and infrastructure attacks, and escalating geopolitical tensions.
The EC has proposed an amendment to the EU law overseeing direct foreign investments. This change will make all Union countries check and possibly block investments perceived as security threats. The monitoring scope will also include investments controlled by foreign companies.
Is Brussels Referring to China?
Although Brussels' plans haven't directly pointed towards any country, media speculations strongly suggest that the European Commission primarily thinks of China. China makes no effort to hide its close ties with Vladimir Putin's regime. Europe's dependence on Russia led to significant challenges following the armed invasion of Ukraine, leading to Europe discontinuing the use of Russian energy resources.
In favour of greater Union-level coordination, the Commission is proposing control over product exports that could potentially be utilized by foreign intelligence or military services. Despite sanctions, Western technologies are still falling into Russian hands.
According to Reuters, it may take up to three years before these changes are implemented.