ARTICLE21 May 2021

EU should introduce new rules against foreign subsidies

Companies operating in the single market should do so on a level playing field, allowed to compete on their own terms and on the basis of a market economy. 

Photo: Ulf Börjesson/Ernst Henry Photography AB

The Commission’s proposal for a Regulation is based on the White Paper that it published in the summer of 2020. The proposal now presented has broadly the same content and structure as set out in the White Paper. Specifically, this is a general capacity for the Commission to examine foreign subsidies, namely those subsidies from third countries to companies engaging in any form of economic activity in the EU internal market, provided that the subsidies exceed a certain threshold.

The Confederation of Swedish Enterprise believes that new rules to combat foreign subsidies should be introduced. It is essential that companies operating within the internal market do so on an equal basis; the proposed new rules, together with other existing regulations, can lead to a more level playing field. This will mean that companies can compete on their own terms and on the basis of a market economy. In the longer term, these rules could also lead to greater transparency and insight into the prevalence of foreign subsidies.

At the same time, it is important to stress that any such rules must be proportionate, non-discriminatory and legally certain. Also, they must not unduly hinder foreign investment in the EU and not lead to higher administrative costs than necessary. Subsidies should ideally be regulated on a global level, preferably within the framework of the WTO. That way, the rules can be built on wide acceptance and thus have a strong mandate from all parties involved.

The changes that the European Commission has made to its proposals compared to the original White Paper are largely in line with the suggestions made by the Confederation of Swedish Enterprise during the Paper’s consultation period. We are therefore generally positive towards these proposals, and would like to draw particular attention to the certain positive and important changes. Specifically, that higher thresholds provide a more proportionate regulatory framework while reducing administrative costs, and that the Commission is given primary responsibility for the regulatory framework, thus allowing for harmonised and competent supervision.

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Contact our EU Office

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Contact our EU Office

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Subscribe to our Swedish newsletter
Publisher and editor-in-chief Anna Dalqvist