EU seeks tougher checks on foreign firms using subsidies to buy European firms

[June 09, 2020]  By Foo Yun Chee

BRUSSELS (Reuters) - The Europe Union wants to introduce more vigorous checks on foreign state-owned or state-backed companies buying European firms to prevent the use of unfair subsidies, the EU antitrust chief said on Tuesday, the latest move to step up protection.

Margrethe Vestager said in an interview that foreign companies use subsidies "without us knowing, they come without checks, there is a high risk that they will fragment the single market or unlevel the playing field."

Vestager, who is responsible for vetting state aid granted by EU governments to their companies, will present her proposal known as the white paper on foreign subsidies next week.

She said companies already doing business in the 27-country bloc and suspected of being a foreign state-owned or state-backed entity could also be investigated.

Vestager who has given approval for more than 2 trillion euros to be pumped by EU governments into their own coronavirus-hit companies in the last two months, said carefully monitored EU state support differed from subsidies used foreign companies.

"We know what is going on, we also know that it's temporary in character, this is what characterises these many different issues. We know they are needed and the decisions we take minimises the risks of fragmentation of the single market and none of that is the case for foreign subsidies," she said.

(Reporting by Foo Yun Chee, editing by Marine Strauss)

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