European Commission unveils plan to tackle foreign subsidies

BRUSSELS, May 5 (Xinhua) -- The European Commission on Wednesday unveiled a plan to tackle foreign subsidies that could potentially cause distortions in the European Union's (EU) single market.

The legislative proposal follows the adoption of a White Paper in June 2020 that deals with the distortive effects caused by foreign subsidies, as well as extensive consultation with stakeholders, the commission said.

It said the plan is aimed at closing the regulatory gap in the single market, "whereby subsidies granted by non-EU governments currently go largely unchecked, while subsidies granted by Member States are subject to close scrutiny."

In 2019, foreign direct investment (FDI) in the bloc was worth more than 7 trillion euros (8.4 trillion U.S. dollars), accounting for a quarter of all the FDIs in the world, European Commission Executive Vice-President Margrethe Vestager told a press conference.

She emphasized the importance of ensuring a level playing field in the EU to support the recovery of its economy that has been hit hard by the COVID-19 pandemic.

Under the proposed regulation, the commission will have the power to investigate financial contributions that are granted by public authorities of a non-EU country and benefit companies in the EU. In this context, the regulation proposes the introduction of tools including notification and market investigation.

The White Paper issued last year provoked concerns among foreign stakeholders. The commission said in September it had received 150 submissions to public consultation.