Germany reveals plan to stop foreign takeovers
February 5, 2019
Germany's economy minister, Peter Altmaier, on Tuesday officially launched a controversial plan aimed at developing the country's industrial sector and increasing its international competitiveness in technology and innovation.
Though it was the first time Altmaier fully detailed the "National Industry Strategy 2030," some key points had previously been revealed to the German media the previous week, prompting the minister to take the defensive against claims of protectionism and intrusive state intervention.
Plan 2030's main points
- The state must support innovation and help bring key technologies to Germany and Europe while reducing business costs from new environmental and social policies.
- Competition law must be overhauled to facilitate company mergers in specific situations when a larger company could better compete at a global level.
- German or European companies should be encouraged to take over key technology companies up for purchase.
- In "exceptional situations" the state must be allowed to partially nationalize such a business in order to avoid takeover by a foreign investor.
- An investment fund would be created in order to support these partial state takeovers, which would be of limited duration.
- Industry should make up 25 percent of Germany's economic value by 2030, up from 23.4 percent today, and 20 percent of the EU's by this same date.
Read more: Germany prepares law for foreign takeovers
Altmaier's key statements
New "national and European champions" need to be created in order to compete with China and the US, Altmaier, a member of Angela Merkel's conservative CDU party, said in Berlin.
In a world of rapid technological development, whoever controls these new technologies has a chance "to be at the front of the pack," while those who "sleep through [these changes] will become the workshop extensions of others," he said.
Read more: Germany launches digital strategy to become artificial intelligence leader
Criticism from multiple sides
The economy spokesperson for the business-friendly Free Democrats (FDP), Reinhard Houben, described Altmaier's plan as "a planned economy at the end of the day" and called for businesses to be freed from tax, other state contributions and "bureaucratic restrictions."
The Left's party head, Bernd Riexinger, accused Altmaier of failing to act in the interest of society and complacently handing over more power to corporations.
Anton Hofreiter, the head of the parliamentary group for the environmentally friendly Greens, who currently sit in the opposition, said, "instead of blowing up large companies into corporations, the government should profess its adherence to clear ecological and social goals."
How did the plan come about?
Altmaier said that the 2016 acquisition of German robotics maker Kuka by a Chinese company had left a lasting impression on him.
The 2030 plan also specifically named Siemens as "an existing champion" and a potential target for state support. The German tech and industry conglomerate wanted to merge its rail operations with those of France's Alstom in order to rival competitors including China's CRRC. The European Union Commission is expected to deny the merger on Wednesday.
What happens now?
Altmaier will now discuss his national strategy with representatives from politics, business, trade organizations and unions. The expected outcome is a new industrial strategy that would then be adopted by the German government.
cmb/aw (AFP, Reuters, dpa, AP)