European countries should buy stakes in companies to stave off the threat of Chinese takeovers, the EU competition chief has said, as Brussels steps up plans to protect businesses fighting for survival during the Covid-19 pandemic.
Regulators are already working on proposals to grant EU countries sweeping powers to derail unfair competition from state-backed enterprises.
Margrethe Vestager, also executive vice-president of the European Commission, told the Financial Times: “We don’t have any issues of states acting as market participants if need be — if they provide shares in a company, if they want to prevent a takeover of this kind.
European companies have long been in the sights of Chinese rivals, but the sharp economic downturn caused by the coronavirus outbreak and subsequent steep falls in share prices across the continent have increased the potential for overseas bids.
“It’s very important that one is aware that there is a real risk that businesses that are vulnerable can be the object of a takeover,” Ms Vestager said. “The situation now really underlines the need so we work really intensively. This is one of our main priorities.”
She cautioned against rushing out measures, saying the best solution would be to draw up regulations that acted as a deterrent. “People are more than welcome to come do business in Europe but not to do that with unfair competitive means. It has to have this double function.”
Full Content: Financial Times
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