EU officials have drafted plans for a technology company fund, to compete with giants in the US and China.
Reports from the Financial Times suggest that the European Union has drafted a document for a “European Future Fund” that would invest €100 billion in “high-potential European companies.” It’s not certain yet as to how many EU member states would be open to the idea.
The idea is one of many initiatives that officials have presented to the incoming president of the European Commission, Ursula von der Leyen.
There have been strong calls from France and Germany recently to develop stronger policies to protect European industry from competition in China. The big four companies in technology – Facebook, Google, Amazon and Apple – all hail from the States, with very few big names coming from Europe.
The document warns that non-EU companies “with unprecedented financial means [have] the potential to obliterate the existing innovation dynamic and industrial position of EU industry in certain sectors”.
“Europe has no such companies,’’ the document states. “This presents a risk to growth, jobs, and to Europe’s influence in key strategic sectors”.
Von der Leyen has promised that her commission will “invest in innovation and research, redesign our economy and update our industrial policy”. She begins her role in November.
According to the Financial Times, France and Germany are likely to back the plan. The Netherlands, however, are unlikely to support Brussels relaxing its competition rules to allow for mergers or “picking winners” in the race to compete with global rivals.
EU officials are hopeful that a central fund will encourage the private sector money to “crowd in” to projects. The €100 billion would come from public money funded from EU governments.
China’s sovereign wealth fund, the China Investment Corp, is among the biggest in the world, whilst non-EU country Norway currently boasts Europe’s biggest nationally owned fund.