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2/16/17

High-End Technology: EU states seek protection for high-end technology - by Andrew Rettman

France, Germany, and Italy have urged the European Commission to better protect EU states from foreign countries seeking to acquire high-end technology.'

EU countries can already block foreign investments on national security grounds, but the three countries’ economy ministers said in a joint letter to EU trade commissioner Cecilia Malmstroem that they should also be able to do it for “economic” reasons.

"EU law gives the right to member states to prohibit foreign investments which threaten public security and public order," they said, according to the Reuters and DPA news agencies.

"What is needed is additional protection based on economic criteria taking into account, and with reference to, the Commission's expertise.”

They said EU states “should have more scope to investigate individual takeovers and, where applicable, block them”.

They added that the kinds of deals that should be targeted were “unfair  ... because they rely on state funds or are aimed at buying up important technologies”.

They also complained that foreign states abused EU open markets by closing their doors to European investors.

“We are worried about the lack of reciprocity and about a possible sell-out of European expertise, which we are currently unable to combat with effective instruments," the ministers, representing the eurozone's three largest economies, said.

The letter did not mention China, but China was recently in the spotlight in Germany on technology-transfers and is notorious for blocking EU investments in its firms.

Berlin blocked the takeover of German electronics firm Aixtron by China’s Fujian Grand Chip Investment last year on grounds that its microchips could be used in Chinese nuclear weapons.
German chancellor Angela Merkel also complained about lack of reciprocity after the €4.5 billion buy-out of German robotics firm Kuka by Chinese electrical appliance maker Midea.

Germany’s deputy economy minister, Matthias Machnig, told the Financial Times newspaper on Tuesday that foreign companies should be obliged to “show that their investments in Germany are not driven by the state, and that financing for their deals is in keeping with the market”.

“It is a principle that we want to establish in Europe, together with France and Italy,” he said.
He told German daily Handelsblatt that: “Germany is for open markets. We support the investment of foreign companies in Germany”.

He added, however: “Our companies are in a tough competition with countries that themselves are not as open as Germany and Europe.”

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