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Sant calls on the EC to give more power to national competition authorities to investigate foreign business deals

Alfred Sant

In his intervention during an exchange of views on a proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal European market, Alfred Sant called for greater clarity on how the European Commission will carry out investigations about business deals being concluded with foreign partners. He recommended that the national competition authorities should have exclusive competence to investigate cases which fall below the threshold established in this Regulation so that the European Commission can focus on more important cases whilst a more rigorous scrutiny of smaller cases can take place. Sant is the S&D rapporteur on the opinion which ECON is preparing on the Regulation.

The primary aim of the Regulation is to address the distortive effect foreign subsidies might have on the functioning of the internal market. It proposes the introduction of three “tools”: One will give the power to the European Commission to investigate mergers or acquisitions of a controlling stake. The second for investigating procurement bids in public tenders; and an ex-officio investigative tool covering other investments outside the two main categories.

Addressing the European Parliament Economic and Monetary Affairs Committee (ECON) Head of the Labour S&D delegation Sant concurred with the European Commission that flexibility is important but he pointed out that it should be ensured the European market functions in a stable and transparent manner. This would avoid giving the impression that the European continent is becoming an unattractive venue for legitimate foreign investment. In this regard, Sant requested more clarifications on the so called “balancing instrument”. The balancing instrument would allow the European Commission to take into account negative and positive effects of subsidies before imposing any redressive measures. These measures are intended to fully and effectively remedy the distortion caused by the foreign subsidy in the internal market. The former Maltese Prime Minister asked on which basis will it work and if it is going to be left on an ad hoc basis to the bureaucratic process to resolve.

Sant emphasized that the instruments and acts proposed by the European Commission should not only reflect European policies but take account of the wider picture including international trade and investment. The Labour MEP said that the Regulation needs to have clear and distinct thresholds defining when the European Commission will intervene or not, particularly for the ex-officio investigative tool. Sant underlined that to avoid arbitrary decisions, the tool must radically change in format, or simply be dropped.

In conclusion, Sant expressed reservations about the method employed to counter foreign subsidies because its potential repercussions are not being given sufficient consideration.