Meanwhile, the European Commission issued special guidelines on Wednesday to EU capitals on enacting new bloc-wide rules meant to prevent
The European legislation aims to protect “critical infrastructure,” including in the energy, transport, communications, data, space and financial industries. Set to take effect in October, the law also seeks to safeguard “critical technologies” such as semiconductors, robotics and artificial intelligence.
“The coronavirus crisis affects deeply the European economy and many companies are temporarily weakened,” said
The bloc’s national leaders will hold a video conference on Thursday where they will cite a need for member countries “to exercise vigilance so as to ensure the EU’s strategic autonomy, during the crisis and afterward,” according to the draft of a summit statement seen by Bloomberg.
In its guidelines on the investment-screening law, the commission stressed the potential appeal to foreign suitors of medical businesses in Europe.
Member nations must be “particularly vigilant” to ensure that “the current health crisis does not result in a sell-off of Europe’s business and industrial actors,” the commission said. “Among the possible consequences of the current economic shock is an increased potential risk to strategic industries, in particular but by no means limited to healthcare-related industries.”
A senior Italian opposition lawmaker earlier called for the government in Rome to extend takeover defenses to include
“The pandemic means a recession for Italy, the country is extremely weak and we have to reinforce its defenses,” said Urso, a member of the right-wing Brothers of Italy party. He added that he’s confident his proposals will be approved by parliament. Current rules allow the government to block takeovers in the defense, national security, energy, telecommunications and other technology sectors.
Extending the Golden Power rule to banks, however, isn’t needed, according to three people familiar with the country’s financial sector. Banks can only be bought by other lenders because hedge funds or others would need authorization from the
Takeover bids from other EU banks are very improbable during the virus emergency, given the ECB’s recommendation that liquidity be used for lending, the people said. The scenario is similar for banks not supervised by the ECB, given the very high risk that the Italian economy faces a long recession and that non-performing loans will increase. After the emergency, reputational and economic risks will also make takeovers unlikely, the people said.
(Updates with details from EU guidelines in eighth, ninth paragraphs)
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