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EU launches proposal to tackle foreign subsidies

Published: (Updated: ) in European News by .

The European Commission on Wednesday released its new draft law that seeks to better control so-called “distortive foreign subsidies” that non-EU countries give their companies, which then undercut the single market. This is part of the bloc’s new defensive push on the trade front, as Brussels flexes its muscles to protect home-grown companies against the […]

The European Commission on Wednesday released its new draft law that seeks to better control so-called “distortive foreign subsidies” that non-EU countries give their companies, which then undercut the single market.

This is part of the bloc’s new defensive push on the trade front, as Brussels flexes its muscles to protect home-grown companies against the economic might of foreign powers, including an ascending and more assertive China.

“Unfair advantages accorded through subsidies have long been a scourge of international competition,” said Executive Vice President Valdis Dombrovskis. “They distort markets and provide competitive advantages on the basis of the support received, rather than on the quality and innovativeness of the products concerned.”

The EU regulation will give the Commission the power to investigate large mergers with foreign companies and public procurement bids of businesses receiving foreign state aid. Beyond this, the Commission will be able to independently patrol for unfair subsidies in the single market.

If a firm breaches the new rules, the EU can impose punitive measures like forcing companies to divest, stop takeovers of businesses in the bloc or impose fines of up to 10 percent of a company’s turnover.

Source: POLITICO https://www.politico.eu/article/commission-releases-its-proposal-to-tackle-foreign-subsidies/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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