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High time to stop unfair competition by companies receiving distortive foreign subsidies


04 May 2022


Trade & Society

Today, the European Parliament is set to adopt in a vote in Strasbourg its negotiation mandate on a new EU instrument to deal with foreign subsidies distorting the internal market. The new tool would enable the Commission to investigate cases, to require remedies such as repayments of the subsidies, or even impose fines of up to 10% of annual turnover. Following a successful vote in plenary, Parliament will enter into negotiations with EU member states as of tomorrow.

Inmaculada Rodríguez-Piñero, negotiator and newly elected S&D coordinator for trade, said:

“It’s high time to equip the EU with an effective tool to investigate, redress and block unfair competition from foreign companies. Today, European companies must comply with strict rules on state aid, while non-EU competitors can benefit from foreign subsidies giving them an unfair advantage. Beefed up with state money, companies can offer lower prices to win a public procurement contract or pay a higher price for taking over another company. That is simply unfair. With this new instrument, we want to close this legal loophole and level the playing field.

“I urge the other political groups to support our amendment calling for more ambitious thresholds to start investigations. Concretely, we want to lower the threshold for public procurement bids from 250 million Euros to 125 million Euros for infrastructure and include a separate category for services with a threshold of 50 million Euros. This would ensure the tool is really effective.

“We call on EU governments to swiftly conclude an ambitious agreement with the European Parliament to ensure the Commission will soon hold an effective tool against unfair play in their hands.”




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