Berlin rejects Sarkozy’s industry takeover plan

October 24th, 2008 - 9:38 pm ICT by IANS  

Berlin, Oct 24 (DPA) French plans to take stakes in strategic industries and shut out big foreign investors were criticised Friday in Berlin, in a new sign of Franco-German discord.French President Nicolas Sarkozy had unveiled his plans the previous day and urged other nations to copy France’s protective measures against sovereign wealth funds.

But Chancellor Angela Merkel’s deputy spokesman, Thomas Steg, said Germany believed existing legislation limiting foreign control of key industries was adequate and “definitely” did not see a need to do any more.

“Germany has a fundamental interest in markets being open,” he said in reference to German investment abroad.

The issue is the latest on which Sarkozy and Merkel have publicly disagreed.

Debate has been going on in Europe and in the US for more than a year about the intentions of investment vehicles for the Russian, Chinese and Arab governments.

Steg warned that if any European Union (EU) member planned to take further steps against outside sovereign wealth funds, it had better be sure this did not “collide” with EU free competition laws.

Germany amended its own foreign investment laws two months ago, giving the government more powers to limit foreign influence on strategic industries such as armaments, energy and telecommunications.

However the Germans, whose economy is based on exports and close business relations with foreign customers, have been wary of affronting sovereign wealth funds which have a long history of investing in Germany.

Sarkozy said Thursday his fund will make available loans to struggling companies in exchange for shares, which will be sold once the company has stabilised. He also promised direct state investment in the economy.

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