Foreign Investment Screening Beyond the COVID-19 Challenge: Overcoming the Emergency

Abstract

The spread of COVID-19 is severely testing the economic systems of most advanced countries, posing new important challenges for the States involved. These include the decision taken by several European countries to offer support and protection to companies deemed strategic. The late 20th century was characterized by the progressive reduction of the public sphere as a result of increased privatization processes in most European countries, while the 21st century appears to be fueling a re-expansion of public interventions in the economy to support companies hit by the recent economic crises. This reversal of economic policy is also closely related to the political evolution and development of the countries’ social systems, linked to the relevance of particular economic activities for the satisfaction of specific public interests and needs. The provision of special powers for the State is back in vogue nowadays as a tool for defending the national economy and companies of national interest from potential external aggressions, regardless of the State’s share in the equity structure of such companies. However, this issue raises questions of compatibility with the European discipline: what is the rationale for multiple Foreign Direct Investments Screening policies within a European common market ruled by a single competition policy? Is this compliant with the perimeter of legitimacy identified by the European Commission? Is there room for a new European common strategy to guarantee that of Foreign Direct Investment Screening policies will be effectively tailored to the need of protecting safety and essential community interests?

Keywords: Emergency, Economic Crisis, Investment Screening, Public Companies, European Union, Protectionism, Single Market, Competition, COVID-19

JEL Classification: K 11, K20, K30, K40