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EU foreign investment disunity could fuel populism

Friday, July 7, 2017

Significance

For Germany and France, an important component of this is the treatment of foreign direct investment (FDI). However, prospects for an EU-wide response appear to divide the bloc, with many countries rejecting the principle of regulation by the European Commission.

Impacts

  • A Commission proposal on investment scrutiny will test the limits of Chinese influence and EU unity.
  • If any move on investment scrutiny is seen as singling out China, it could undermine the country’s economic relationship with the EU.
  • This could stall progress on a bilateral investment treaty and any free trade agreement that might follow.
  • Successful resolution of EU-Chinese tensions could open up a more coherent and reciprocal approach to FDI scrutiny and control.
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