FDI Screening - Joint Business Coalition Letter

Foreign investment is vital for Europe’s global competitiveness, innovation capacity and job creation. However, the volume of foreign investments in the EU currently remains significantly below pre-pandemic levels. This partly reflects global trends, such as increasing geopolitical and macroeconomic uncertainties, but also evidences a critical need to adopt measures that improve Europe’s attractiveness and investment climate, while helping address legitimate national security concerns. Such measures are needed not only to stimulate economic growth, but also to reinforce the EU’s position as a competitive and secure investment destination.

The proposed Foreign Investment Screening Regulation is a key opportunity to simplify the existing patchwork of complex and fragmented investment screening rules in the EU, which creates a significant burden for investors. A more harmonized screening system, with clear and consistent terminology and criteria, streamlined procedures and stronger coordination between national authorities would help reduce red tape and provide greater confidence to those seeking to invest in the EU. It would also help enhance the Single Market by reducing unjustified barriers, notably for investments involving multiple Member States, which now represent more than a third of notified transactions.

While we welcome the provisions designed to enhance coordination and efficiency of screening processes, we are also concerned that the proposal’s broad scope could impact a disproportionate number of transactions, undermining the EU’s attractiveness as an investment destination, and deterring investments that are needed to modernize and strengthen the EU’s supply chains. We urge the co-legislators to ensure a balanced and targeted Regulation that safeguards Europe’s security interests without stifling its economic growth and competitiveness, enabling a resilient and prosperous future for industries and investors alike.

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