Foreign subsidies: EU should prevent market distortions

Today, the European Commission published its proposal for a regulation on foreign subsidies that distort the EU internal market. BusinessEurope supports the efforts of the Commission to ensure fair market conditions for all economic operators.

BusinessEurope Director General Markus J. Beyrer said: "The increased activity of companies in the European Union benefitting from distortive foreign subsidies has exposed several regulatory gaps not addressed by existing EU instruments. We’ve repeatedly pointed to this problem. Today’s Commission proposal is a step in the right direction in addressing existing legal loopholes and preventing market distortions."

In its contribution to the public consultation on the Commission White Paper on distortive foreign subsidies, BusinessEurope emphasised the importance of having an effective instrument that is consistently applied across the whole EU while minimising the burden on business. The instrument should focus on major subsidies leading to significant distortions of the level playing field and the European Commission should be the main competent authority. At the same time, BusinessEurope stressed that the EU must remain open to trade and foreign investment, which are critically important to our economic prosperity.

Beyrer added: "Today’s legislative proposal has taken on board many of the recommendations the European business community brought forward in its reaction to the Commission White Paper. We must move swiftly towards adopting a comprehensive and effective instrument that addresses market distortions while providing legal certainty to economic operators. BusinessEurope stands ready to engage actively in this process and provide the views of the European business community during the upcoming discussions.

BusinessEurope has repeatedly pointed to this problem, including in our comprehensive position paper "The EU and China - Addressing the systemic challenge" from January 2020.