By Philip Blenkinsop
BRUSSELS (Reuters) – The European Union is likely to conclude a far-reaching plan before the end of the year to coordinate scrutiny of foreign investments, notably from China, the EU’s trade chief said on Friday, despite reservations from Italy.
Under the plan, being developed following a flurry of Chinese investments, the Commission would investigate foreign investments in critical sectors to protect Europe’s strategic interests in some fields of technology.
European Trade Commissioner Cecilia Malmstrom said that three-way talks to find a compromise that EU countries and the European Parliament could accept had been very constructive, with just a few issues outstanding.
“It’s not stuck, it’s moving forward. There’s a good chance to conclude this by the end of the year,” Malmstrom said before a meeting with national ministers responsible for trade.
Italy’s anti-establishment government, which is bent on overhauling the way the EU does business, is seeking closer investment ties with China and is wary of offending Beijing, although Malmstrom denied that the EU proposal was “anti-China”.
“We have been engaging intensively with the (Italian) government to try to understand the concerns. They are not against the proposal, they have some concerns on the scope. I hope we can have an agreement where Italy is on board.”
Lawmakers in the parliament are pushing for a longer list of critical sectors, such as media and nano-technology, that would prompt investigations. Britain and Romania had reservations, but fresh doubts emerged this week about Italy’s stance.
At a technical meeting on Tuesday, Italy surprised other countries by insisting that the final text of the legislation must not deviate from a more minimalist initial proposal, two EU officials told Reuters.
Austrian Economy Minister Margarete Schramboeck, whose country holds the six-month rotating EU presidency, said she too was hopeful of a deal by year-end.
“Talks are continuing with the Italians. What we have is a very good solution and I am convinced that we will get it approved,” she said.
Italy’s representative, Michele Geraci, told a public session of the meeting that Italy supported the principle of a screening mechanism. However, he said the current proposal, in which countries were required to share information with the Commission, infringed countries’ rights to decide if they wanted to block an investment or not.
Italy wanted information-sharing to be voluntary and to make clear that the Commission could only make proposals, not decisions.
Malmstrom said it was crystal-clear that the final decision on any investment would remain with the member states.
Schramboeck said the EU states and the EU Parliament’s positions were now not far apart and that the goal was to reach a deal in talks on Nov. 28.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.