Italian PM Draghi seeks broader shield from China company bids

ROME (BLOOMBERG) – Prime Minister Mario Draghi said he backs an extension of state protection for Italian businesses, after revealing that his government recently blocked a Chinese takeover of a semiconductor company.

Mr Draghi told reporters in Rome on Thursday (March 8) that he’ll support an earlier call by Economic Development Minister Giancarlo Giorgetti for the Italy’s so-called Golden Powers rules to be extended to the automotive and steel sectors.

The rules “must be used when necessary”, Mr Draghi said.

“There was a case recently in which the government decided – an Italian semiconductor company which was to be acquired by a Chinese company. It was blocked.”

Mr Draghi did not name the firms involved.

European Union officials, pressed into a new phase of big government by the pandemic, have been scrambling to protect prized assets after the worst stock-market rout in nearly a decade left companies vulnerable to takeovers.

Berlin, Paris, Rome and Madrid have all beefed up their powers to veto investment from outside the EU.

Extending rules

Mr Giorgetti, of the anti-migrant League party, said earlier that the administration is considering extending the rules which involve state measures to block or manage foreign ownership in businesses deemed strategic, in sectors including automotive and steel.

The recent decision to block a takeover was “common sense”, Mr Draghi said.

“The lack of semiconductors forced many auto production companies to slow production last year, so it has become a strategic sector and there are others like it.”

League leader Matteo Salvini, whose party backs Mr Draghi’s government, called last month for the government to protect truck and bus business Iveco as a strategic asset, saying it would be a national disaster if the company were sold to China FAW Group.

Mr Draghi said his government’s next decree for further stimulus measures, involving a request to widen the budget deficit, will probably be greater than the previous amount.

Mr Draghi has already secured approval for a €32 billion (S$51 billion) package originally requested by his predecessor, Mr Giuseppe Conte.

The premier also said his government confirms its latest target of half a million daily Covid-19 vaccinations by the end of the month, even with new restrictions on the AstraZeneca vaccine.

More on this topic

Still, that marks a delay compared with the premier’s original goal of half a million shots per day by mid-April.

The government says it plans to reach 80 per cent vaccine coverage by the end of September.

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