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Europe needs to be less naive in the face of increased global competition

We are witnessing an important shift in Europe’s competition policy towards foreign direct investment. EU’s authorities are prepared to take all necessary measures to strengthen control on foreign and offshore investment. No one today in the EU questions the fact that key industries and services must be protected from unfair competition. But it is now time to move from words to action. Because procrastination is not a credible policy. It is against this background, that the current US administration asked a few weeks ago the Portuguese government to turn down a take-over bid by the Chinese firm China Three Gorges on the Portuguese electricity company -controlling 80% of Portugal’s electricity- Energias de Portugal. The concern about the acquisition of key firms by Chinese state-owned companies and the risks resulting from a trade conflict with the USA increased awareness among European policy makers. Yet, many sectors of activity such as refining, pharmaceuticals or electronics are already dominated by investment from outside the EU. Defensive measures only will not be enough to guarantee Europe’s security. But it is a step in the right direction. However, the Europeans will have to invest much more on education and research & development to achieve a degree of technological independence in particular in digital infrastructure. In any event, Europe must rapidly become less dependent on new technologies developed by other countries.

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