Daily Management Review

Germany to protect German companies from foreign takeovers


02/06/2019


German Economy Minister Peter Altmaier proposed creating a special state investment fund that could temporarily take over German companies, which foreign firms claim to buy. In "exceptional" cases, the state could partially nationalize such firms. Even before their official publication these plans caused a mixed reaction, including reproaches for protectionism and attempts of excessive state intervention in the economy.



Olaf Kosinsky
Olaf Kosinsky
The proposals of the German Minister of Economics were made within presentation of his “Strategy for the development of the national industry until 2030”. It is stated that the main goal of the strategy is a more active role of the state in maintaining competitiveness of German industry and its leading positions, both at the European and international levels. The plan contains several suggestions for how this can be achieved.

First, the German government needs to support development of innovations and technologies in the country and at the same time do everything so that costs of the innovation business are reduced, including the costs of meeting state requirements in the field of ecology and social obligations.
Secondly, it is necessary to revise competition law so that in some cases it will be easier for large German companies to compete internationally.
Third, the government should encourage German and European industrial companies to acquire technology firms that would help improve competitiveness of German and European industry.
However, the proposals of Mr. Altmaier, which were dubbed protectionist before publication of the project in Germany, became the most controversial.

In particular, the Minister proposes, in “exceptional” cases, to allow the government to partially nationalize large German industrial companies that foreign firms or states claim to take over.

In addition, he speaks about the need to create a special state investment fund, which will not only support industrial companies, but will also be ready to make a counter-proposal when foreign investors attempt to acquire a German firm.

The proposals of Peter Altmaier have already been met with objections among a number of German politicians. According to DW, a representative of the Free Democrats party, Reinhard Houben, called the Minister’s initiatives “planned economy” and called on German businessmen to fight more actively against excessive tax burden, government interference in market operations and bureaucratic restrictions. The head of the Left Party, Bernd Riexinger, accused Peter Altmaier of not acting in the public interest, but in the interests of large companies. And Anton Hofreiter, head of the parliamentary faction of the opposition Green Party, said: “Instead of turning the already large companies into real corporations, the government should better signify its commitment to environmental protection and social welfare.”

source: dw.de






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