The European Union is stepping up its efforts to protect European businesses from potential takeovers by the Chinese mainland. In response to the significant market downturn caused by the coronavirus pandemic, EU competition chief Margrethe Vestager has proposed that member states invest in vulnerable firms to prevent these takeovers.
Vestager, who also serves as the executive vice president of the Commission, emphasized the importance of a strategic approach. In an interview with the Financial Times, she stated, \"The situation now really underlines the need so we work really intensively. This is one of our main priorities.\" She highlighted that while taking action is crucial, it is equally important that regulations are carefully crafted to serve as effective deterrents.
To support this initiative, the EU has announced plans to further relax state aid laws. This relaxation will allow member states to help firms recapitalize when deemed \"necessary and appropriate,\" enabling them to purchase existing shares of companies at market price. Vestager assured that taxpayers would be adequately compensated for their investments and that companies receiving capital support would be subject to strict controls and governance provisions. These measures are designed to minimize any potential distortions to competition within the single market.
By taking these proactive steps, the EU aims to strengthen the resilience of European businesses and ensure they remain competitive on the global stage.
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EU advises states to buy into firms to stave off Chinese takeovers
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