The entry of the Chinese shipping company Cosco into the port of Hamburg caused a stir in Germany. The EU is now passing a law that will make it more difficult for third countries to take over European companies. Foreign state-owned companies in particular should no longer be given a chance.
In the future, the European economy will be protected more strictly against competition from countries like China that distorts competition. The EU states have adopted a corresponding law, as announced by the Czech EU Council Presidency. The Czech Republic currently has the regularly rotating presidency among the EU countries. The EU regulation creates the possibility of prohibiting state-subsidized companies from third countries from taking over companies from the EU. In addition, companies supported with state money can be excluded from public contracts.
Before major takeovers or mergers, companies will have to disclose whether they have received subsidies of more than 50 million euros in recent years. All takeovers of companies with an EU turnover of 500 million euros or more are affected. When applying for public contracts, subsidies from a contract volume of 250 million euros must be disclosed.
In addition, the EU Commission's competition watchdogs will have the opportunity to examine takeovers and contract awards below the thresholds on their own initiative in the future. Companies that do not comply with the new rules on reporting obligations can be fined.
Investments by Chinese companies in Germany are controversial. The participation of the Chinese group Cosco in a terminal in the port of Hamburg recently caused a stir. Chancellor Olaf Scholz pushed through a slimmed-down entry by the Chinese state shipping company against massive resistance from several ministries.
Since the EU Parliament had also already approved the regulation, the way is now finally clear. It enters into force 20 days after its publication in the EU Official Journal. The law was based on a proposal presented by the European Commission in May 2021.
