However, we agree that there might be instances when clearly-defined security interests could justify relaxation of a merger decision. For example, in certain key network infrastructures, there might not be much competition among European producers, but disallowing a merger would mean that a foreign company will dominate that infrastructure, with negative implications for security.
In our view, there should therefore be security control mechanisms in merger control. But who could define that for intra-EU mergers? The activation of the clause would have to be based on a clearly defined and limited set of criteria directly relating to security concerns. This solution would not require a treaty change and would avoid the politicisation of competition policy decisions. But we regard such potential developments as positive.
The US and the EU are strengthening their investment screening and export control instruments see Box 2. However, their approaches and even their aims differ significantly. The US explicitly intends to make use of these instruments to preserve technological leadership, restrict access to critical technologies and serve unspecified foreign policy goals.
It grants wide discretion to the executive to determine what their scope will be.
More blocks are expected to be auctioned this year. Washington had previously accused Iran of being behind May 12 attacks on four tankers anchored off the United Arab Emirates port of Fujairah at the entrance of the Strait of Hormuz. Create a Foreign Policy account to access 1 article per month and free newsletters developed by policy experts. South Sudan — The agreement with Israel incorporates free trade arrangements for industrial goods and concessionary arrangements for trade in agricultural products a new agreement here entered into force in , and opens up the prospect for greater liberalisation of trade in services and farm goods from Rosemary Hollis. However, at the moment the PDF does not have sufficient resources to provide a meaningful amount of finance for major projects.
By contrast, the EU initiatives are motivated by much more specific aims, of which technological lead is not part. At the EU level, the scope for discretionary decisions is also much more limited. As far as foreign investment is concerned, the EU and its member states are bound by the provision of the Treaty that prohibits restrictions on the free movement of capital Art. Unlike in the US, limitations on FDI, including from third-country companies, cannot be justified by such broad aims as the preservation of technological leadership.
And while a clause of Article 64 TFEU provides an escape from the prohibition of restrictions on capital flows from or to third countries, it requires unanimous agreement of the EU member states. The potential for blocking foreign investments remains therefore much more circumscribed than in the US case. Several EU countries have introduced, or are considering introducing national security exceptions to standard investment rules. In the UK, the government announced in that foreign-initiated mergers and investments that might raise national security concerns will be subject to national security assessments.
In the event an assessment concludes that there is a risk to national security, the government will impose remedies or block an investment altogether. Similar provisions have been introduced in Germany. On 14 February , the European Parliament adopted an EU framework for screening foreign direct investment.
The regulation introduces a mechanism for cooperation and information-sharing among member states but stops short of giving veto powers to the Commission. The objective of the framework is greater coordination of national security-related screening of foreign investment. It will help increase awareness as well as increase peer pressure across the EU. But it does not establish an independent EU authority for investment screening. Foreign investment can be banned if infrastructure is used in a way that threatens national security.
A draft regulation proposed in by the European Commission and under consideration at time of writing, would broaden the definition to include cyber surveillance technology, clarify intangible technology transfer and technical assistance and add a requirement for authorisation of export items not explicitly listed. However, the focus remains on security and human rights aspects rather than on safeguarding technological superiority, as it is in the US. In our view, the EU is right not to emulate the US in its approach to investment and export control.
But the European CFIUS framework is unsatisfactory because it keeps the definition of security concerns at the national level — while an integrated single market requires more than coordination to effectively protect security interests across the EU. The EU should develop a common approach and common procedures for the screening of foreign investments and it should empower the Commission with the right to recommend on security grounds the prohibition of a foreign investment. The final say should belong to the Council deciding by qualified majority.
Furthermore, not all decisions are of a black and white nature. For this reason, the EU should also develop instruments, such as a dedicated investment fund. This would make it possible to offer member states alternatives when foreign investments are deemed undesirable. The revised US approach to export control and foreign direct investment screening. The US in late updated its legislation on export control and investment screening to address its concerns on China, in particular concerns on technology diffusion. This broad statement gives the executive extensive discretionary powers to limit or ban exports.
The legislation expands the jurisdictional reach of export controls and tightens restrictions. For example, it establishes an interagency review process in order to identify emerging and foundational technologies currently not covered by export controls. Furthermore, the process to obtain export licenses for critical technologies will be more restrictive.
CFIUS is authorised to review certain foreign investments and determine their impact on national security.
Sven Behrendt is Middle East senior research fellow of the Bertelsmann Group on Policy Research of the Center for Applied Policy Research, Ludwig-Maximilians-University, Munich. Christian-Peter Hanelt is director of Project Europe and the Middle East at Bertelsmann Stiftung. Christian-Peter Hanelt is director of Project Europe and the Middle East at Bertelsmann Stiftung, Gütersloh, Germany. Almut Möller is head of the Alfred von .
The new law widens the range of transactions to include non-controlling investments in US firms that are engaged in critical technology or other sensitive sectors. The rule establishing the CTPP lists critical technologies including defence articles, chemical, biological, nuclear and missile technology, and emerging and foundational technologies defined in section of ECRA.
The EU has long regarded global finance as a domain in which the US-led multilateral order reigned supreme. Reflections on the reform of the international monetary system notwithstanding, the working assumption has been that the US dollar would remain the reference global currency for trade and investment purposes and the global financial architecture would remain centred on the Bretton Woods institutions.
As far as payment infrastructure was concerned, the issue was simply not on the radar screen. These assumptions — which were already somewhat shattered by the global financial crisis and the euro-area crisis — have been challenged by the US decision to leverage its central role in the global monetary and financial system to impose its own international policy preferences.
An already heterogeneous global monetary and financial system is now confronted with a real risk of fragmentation, if not ultimately break-up. In this context the EU is confronted with a series of strategic choices. With a share of about 22 percent, still close to the level but significantly below the level reached in the early s , the euro is the second international currency after the US dollar and significantly ahead of other currencies 3. Clearly, the euro is an important international currency with a strong regional reach and a strong role in the invoicing of euro-area trade flows, but is very far from challenging the dominance of the US dollar.
Pisani-Ferry and Posen mentioned five factors that then accounted for the limited international reach of the euro: a limited economic base, financial fragmentation, uncertain governance, non-economic limitations by which they essentially meant the lack of an European security policy and a discouraging stance towards its de-jure adoption by third countries. The other observations made by Pisani-Ferry and Posen remain valid.
However, the European Commission adopted a more positive tone and outlined proposals that would contribute to increasing the use of the euro by non-residents,  including the promotion of its use for international agreements and transactions in the energy and food sectors, and for invoicing for sales of aircraft. Piecemeal initiatives are unlikely to bring about significant change.
Three reforms could however significantly affect the international role of the euro:. The global financial architecture was initially conceived as a single system structured around two sister institutions: the International Monetary Fund and the World Bank. Regional development banks also provided support, but within the framework dominated by the Bretton Woods institutions. An unravelling of the post-second world war financial order is indeed possible.
Growing tensions between the US and China could, for example, lead the US to assert dominance over the Bretton Woods system where it holds a blocking minority and lead China to secede from it and build a separate system of bilateral, regional and multilateral financing arrangements. Short of outright fragmentation, adversarial behaviour within the multilateral institutions is also a distinct possibility.
To cope with these challenges, the EU is equipped with two significant financial instruments: the European Investment Bank EIB , with goals of fostering infrastructure development, innovation, investment in smaller companies and the transition to a low-carbon economy in the EU, and the recently-created European Stability Mechanism, which has the core mission of providing financial assistance to euro-area countries that risk losing market access.
The EU also contributes, alongside the IMF, to financial assistance to non-euro area members balance-of-payment assistance and to partner countries macro-financial assistance.
minkanews.com/core/lola/14125-game-pazzo.php Europe is also home to several financing institutions, the most significant of which is the London-based European Bank for Reconstruction and Development. The EBRD was established in to support the private sector in central and eastern Europe and the former Soviet Union during the transition to a market economy.
It has a diversified shareholder base, with the EU and its member states accounting for The United States is also a founding member and holds a 10 percent capital share. China joined EBRD in , holding 0.
The bank has gradually broadened its scope to intervene in the Maghreb, Egypt, the Middle East and Mongolia. The EU so far has not taken a strategic approach to the reshaping of the global financial architecture. Moreover, US-EU agreement can no longer be taken for granted.
Europe should think strategically and prepare options for responding to a transforming international system. The willingness of the US to exercise political power over the international payment system makes European firms vulnerable to unilateral pressure. The creation of a special vehicle for Iran should therefore be regarded as a political signal rather than an actual channel for significant transactions. At the core of the global payment infrastructure is a financial messaging service, SWIFT, which is used for almost all cross-border payments.
Such a global public good can only function well if all major players support its activities. By its very nature, it is highly interconnected, and is therefore also subject to political pressures from governments. China and Russia had already noticed the vulnerability that participation in such an interconnected payment system presents. They have now fully functional domestic payments and some domestic cards and intend to connect them; other countries have expressed an interest in joining.
The option of separating out its financial and, as a consequence, economic system from that of the US is not one the European Union can pursue or wishes to pursue. The only way for it to oppose unilateral US secondary sanctions with which it disagrees is to rely on retaliation. The size of the European economy and the European market would be large enough for the threat of retaliatory measures to weigh significantly on US unilateralism.