Germany to restrict foreign capital in cos

FRANKFURT: The German government is considering steps to protect companies from unwanted advances by foreign state-owned investment funds, with proposals to be drawn up by autumn, Chancellor Angela Merkel said. Ms Merkel told the Handelsblatt that her conservative CDU party “is to draw up a proposal for legal implementation in the autumn.”

“We mustn’t be naive,” she said. “State-owned funds can also have politico-strategic aims in mind that could be problematic in sensitive areas. “How do we handle state-owned funds that are increasingly looking for investment opportunities in Germany,” Merkel asked.

“And how much foreign influence do we want to accept in security-related areas,” she added. Contrary to France or the US, “Germany is one of the few countries that has almost no restrictions except in defence and coding technologies,” Merkel said.

Berlin was hoping discussions could be held on a Europe-wide level. “A patchwork of different national regulations would be the second-best solution for Europe in the long-term,” she said.

Recently, German finance minister Peer Steinbrueck said Berlin was considering ways of protecting domestic companies in industries like telecommunications, banking, postal services, logistics and energy from foreign investors.

The growing might of investment funds is raising eyebrows in Germany where the relatively low market valuation of key companies make them easy take-over prey. Funds are estimated to have $1.1 trillion at their disposal, without counting the foreign currency reserves of Middle Eastern and east Asian nations.