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Foreign takeovers in #COVID-19 crisis: MEPs push for level-playing field

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The coronavirus crisis leaves EU companies vulnerable to subsidized foreign competitors. Fair competition rules should apply to everyone, insist MEPs.
Companies across the EU suffer from production stoppages and risk becoming targets for foreign takeovers ©Sveta/Adobe Stock©Sveta/Adobe Stock

In a plenary debate on 17 June, MEPs expressed concerns that foreign companies receiving subsidies from their governments may try to gain a competitive edge on European companies or even buy them out taking advantage of their financial difficulties in the Covid-19 pandemic.

The European Commission announced earlier that day the launch of a public consultation on how to deal with the distortive effects in the Ssngle market caused by foreign subsidies. Most MEPs speaking in plenary supported the initiative and emphasised the need for fair competition.

The Commission’s consultation looks at general market distortions caused by foreign subsidies, but also focuses on foreign subsidies facilitating the acquisition of EU companies or providing an unfair advantage in bidding for public procurement.

Christophe Hansen (EPP, Luxembourg) said “China is not the only state on a shopping spree for companies weakened by the impact of the pandemic”, but it is “the elephant in the room in this debate. If we are to keep up public support for our trade policy, we must equip it with the tools to enforce fair competition.”

“The economic impacts of the coronavirus cannot be used to profit from the weaknesses of businesses,” said Agnes Jongerius (S&D, Netherlands), adding: “We can’t just look on as companies receive unfair subsidies and use them to buy our companies."

“Imagine a football match where the foreign side follows rules that are much easier than those on the home side,” said Stéphanie Yon-Courtin (Renew Europe, France). “What’s the point of even watching the match, because you know ahead of time who’s going to win.”

In a report on EU competition policy drafted by Yon-Courtin and adopted in plenary on 18 June, MEPs underlined the need to safeguard critical EU companies and assets from hostile takeovers.

Some MEPs called for strengthening the rules on screening foreign direct investment in the EU. The EU adopted a legal framework on this in 2019. The aim is to make sure that investment does not pose a threat to critical infrastructure or allow access to sensitive information or key technologies. The rules will come into force in October 2020.

Margrethe Vestager, the Commission’s executive vice president, stressed the lack of transparency in foreign subsidies: “Right now, European governments are doing the best they can to help businesses come through the damage that the coronavirus is doing, but they do that in a controlled way, they do that in a transparent way... The reason why we’re dealing with foreign subsidies is that we have no control, no transparency and that is why we stand up against this today.”

Aviation/airlines

Airbus and Air France ordered to stand trial over 2009 crash

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Air France (AIRF.PA) and Airbus (AIR.PA) should stand trial for involuntary manslaughter over their role in a 2009 crash in the Atlantic that killed 228 people, the Paris court of appeal ruled on Wednesday. (12 May)

The ruling reverses a 2019 decision not to prosecute either company over the accident, in which the pilots lost control of the Airbus A330 jet after ice blocked its airspeed sensors.

Victims' families welcomed the ruling, but Airbus and Air France said they would seek to overturn it at the Cour de Cassation, France's highest appeal court.

"The court decision that has just been announced does not reflect in any way the conclusions of the investigation," Airbus said in an emailed statement.

Air France logo is pictured at the Air France check-in at Bordeaux-Merignac airport, as Air France pilots, cabin and ground crews unions call for a strike over salaries in Merignac near Bordeaux, France April 7, 2018. REUTERS/Regis Duvignau
The Airbus logo pictured at the company's headquarters in Blagnac near Toulouse, France, March 20, 2019.  REUTERS/Regis Duvignau

Air France "maintains that it committed no criminal fault at the root of this tragic accident", said a spokesman for the carrier, which is part of Air France-KLM.

Air France flight AF447 from Rio de Janeiro to Paris crashed on 1 June, 2009, killing everyone on board.

French investigators found that the crew had mishandled the situation arising from the loss of speed data from sensors blocked with ice and caused an aerodynamic stall by holding the aircraft's nose too high.

The earlier decision not to go to trial drew legal challenges from the families as well as pilot unions and prosecutors who had pursued charges against Air France alone.

Wednesday's ruling upheld new demands for a trial of both companies from senior prosecutors who have accused Air France of pilot training failures and Airbus for underestimating dangers posed by known problems with the speed sensors.

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Aviation/airlines

Airline launches airbridge to bring relief to virus-stricken India

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The airline Emirates has set up a humanitarian airbridge between Dubai and India to transport urgent medical and relief items, to support India in its fight to control the serious COVID-19 situation in the country, writes Martin Banks.

Emirates will offer cargo capacity free of charge on an “as available” basis on all of its flights to nine cities in India, to help international NGOs deliver relief supplies rapidly to where it is needed.

In the past weeks, Emirates SkyCargo has already been transporting medicines and medical equipment on scheduled and charter cargo flights to India. This latest airbridge initiative takes Emirates’ support for India and for the NGO community to the next level.

HH Sheikh Ahmed bin Saeed Al Maktoum, Emirates’ Chairman and Chief Executive, said: “India and Emirates are deeply connected, since our first flights to India in 1985. We stand with the Indian people and will do all we can to help India get back on its feet. Emirates has a lot of experience in humanitarian relief efforts, and with 95 weekly flights to 9 destinations in India, we will be offering regular and reliable widebody capacity for relief materials. The International Humanitarian City in Dubai is the largest crisis relief hub in the world and we will work closely with them to facilitate the movement of urgent medical supplies.”

The first shipment sent as part of the Emirates India humanitarian airbridge is a consignment of over 12 tons of multi-purpose tents from the World Health Organization (WHO), destined for Delhi, and coordinated by the IHC in Dubai.

Giuseppe Saba, CEO of International Humanitarian City, said: “His Highness Sheikh Mohammed bin Rashid built the International Humanitarian City (IHC), so Dubai, in coordination with humanitarian agencies, would be able to assist communities and families, most in need – around the world. The creation of the humanitarian airbridge between Dubai and India, facilitated by Emirates SkyCargo, Dubai’s International Humanitarian City and UN agencies, to transport urgent medical and relief items, is another example of His Highness Sheikh Mohammed bin Rashid’s vision for the IHC, being brought to life. Last year over 1,292 shipments were dispatched from the IHC in Dubai, setting the standard for humanitarian response globally. We appreciate the great efforts by IHC’s partner Emirates SkyCargo establishing this humanitarian airbridge between Dubai and India in this time of need”.

The freight division of Emirates has a close partnership with IHC, developed over several years of delivering relief materials to communities across the world impacted by natural disasters and other crises. IHC will support Emirates SkyCargo in channelling relief efforts to India through the airbridge.

Following the Port of Beirut blasts in August 2020, Emirates also leveraged its expertise in humanitarian logistics to set up an airbridge to Lebanon to assist with relief efforts.

Emirates has led the aviation and air cargo industry in its efforts to help markets around the world combat the COVID-19 pandemic. The air cargo carrier has helped transport thousands of tonnes of urgently required PPE and other medical supplies across six continents over the last year by rapidly adapting its business model and introducing additional cargo capacity through its modified mini freighters with seats removed from Economy Class on Boeing 777-300ER passenger aircraft along with loading cargo on seats and in overhead bins inside passenger aircraft to transport urgently required materials.

In addition, Emirates SkyCargo has partnered with UNICEF and other entities in Dubai through the Dubai Vaccine Logistics Alliance, to transport COVID-19 vaccines rapidly to developing nations through Dubai. So far, close to 60 million doses of COVID-19 vaccines have been transported on Emirates’ flights, equating to nearly 1 in 20 of all COVID-19 vaccine doses administered around the world.

Through its scheduled cargo flights to close to 140 destinations across six continents, Emirates helps maintain unbroken supply chains for vital commodities such as medical supplies and food.

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Digital economy

Europe's Digital Decade: Commission launches consultation and discussion on EU digital principles

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As a follow-up to its Digital Decade Communication of 9 March, the Commission is launching a public consultation on the formulation of a set of principles to promote and uphold EU values in the digital space. A Europe fit for the Digital Age Executive Vice President Margrethe Vestager said: “A fair and secure digital environment that offers opportunities for all. That is our commitment. The digital principles will guide this European human-centred approach to digital and should be the reference for future action in all areas. That's why we want to hear from EU citizens.” Internal Market Commissioner Thierry Breton said: “This is Europe's Digital Decade and everyone should be empowered to benefit from digital solutions to connect, explore, work and fulfil one's ambitions, online as offline. We want to set together the digital principles on which a resilient digital economy and society will be built.”

The consultation, open until 2 September, seeks to open a wide societal debate and gather views from citizens, non-governmental and civil society organizations, businesses, administrations and all interested parties. These principles will guide the EU and membersStates in designing digital rules and regulations that deliver the benefits of digitalisation for all citizens. The contributions to the public consultation will feed into a proposal from the Commission for a joint inter-institutional declaration on Digital Principles of the European Parliament, the Council, and the Commission. The proposal is expected by the end of 2021. A press release is available online.

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