Theresa Sostmann
Theresa.Sostmann@cor.europa.eu
With geopolitical tensions and security threats on the rise, the EU needs to safeguard critical infrastructure and bolster strategic resilience when managing foreign direct investments (FDI). In an opinion adopted during the plenary session on 20 November, local and regional leaders demand to be formally included in this screening process in order to help assess FDI’s local impact and implications.
Regions and cities are determined to contribute to achieving the right balance between safeguarding EU’s critical infrastructure and resilience and preserving its openness and attractiveness for investment. In the opinion , led by Pehr Granfalk (SE/EPP), CoR members highlighted the necessity of screening investments in essential sectors such as energy, healthcare, food supply, and information networks, in order to ensure transparency and control in the management of these key assets. But the screening process must actively involve local and regional authorities and be effective in the protection against rising threats, including cyber-attacks, disinformation, and foreign control of key assets.
The CoR supports the revised regulation’s aim to harmonise screening practices across Member States but stresses the need for improved coordination and consistency to enhance the EU’s collective security while respecting each Member State’s sovereignty. In this context, the regulation does not seek to measure the general benefits or disadvantages of FDI; rather, it focuses on addressing concerns about foreign investors engaging in European technologies or infrastructure. Although local and regional authorities are not directly included in the regulation, their concerns align with those of the Members States as an FDI can pose risks to other Member States and specific regions. Recognising this, the CoR recommends formally including local and regional authorities in the screening process and in inter-Member State discussions on FDI. This would help regions hosting an FDI, approving or blocking an investment they support or reject, and at the same assist regions that are affected by a screening decision of an FDI in another Member State.
In the opinion, CoR members stressed the importance of aligning the FDI screening process with other EU initiatives, such as those on critical raw materials and the net-zero industry, which are essential for achieving the EU’s goal of open strategic autonomy and hold significant regional importance. Integrating FDI screening with these initiatives supports the EU’s broader ambition of fostering a resilient and sustainable economy across its regions.
Quote:
Rapporteur Pehr GRANFALK (SE/EPP), member of the Solna municipal council and deputy chair of the CoR ECON commission: "Our objective must be to create a regulatory framework that enhances economic resilience while still encouraging innovation and foreign investment. Striking the right balance is crucial for the prosperity of the EU and its citizens. Protecting our critical sectors is a priority, but we must ensure that our approach is not overly restrictive. A well-calibrated screening process can safeguard our interests while keeping the doors open to valuable global partnerships."
More information:
The EU framework for investment screening is part of the Commission's commitment to a Europe that protects its companies, workers and citizens. Due to the high degree of integration within the EU, foreign direct investment* in one Member State could pose risks to security or public order in another Member State, or in the whole Union.
On 24 January 2024, the Commission adopted five initiatives as part of the revised FDI screening regulation to strengthen the EU’s economic security at a time of growing geopolitical tensions and profound technological shifts. One of these initiatives concerns further strengthening the protection of EU security and public order by proposing improved screening of foreign investment into the EU.
Theresa.Sostmann@cor.europa.eu
Sweden
Tag
Member of Municipal Council, Solna Municipality