Nadia Calviño, then-Spanish finance minister, told POLITICO last year that Telefónica “is a key player, not only in the area of telecommunications but also in technology which is related to defense.” She said the government would “apply existing legislation in the view to ensuring the protection of the strategic interest of Spain.”
The Spanish government tasked the state-owned investment company Society of Industrial Participations (SEPI) to purchase a 10 percent stake to counter stc’s holding — a target that it finally reached in May.
European Trade Commissioner Valdis Dombrovskis also sounded concern about the deal, saying “certain investments may put at risk security or public order, therefore the EU’s openness” to foreign direct investment “needs to be balanced by appropriate tools.”
While current rules allow member countries to “impose conditions or, in extreme cases, prohibit the investment” to mitigate national security risks, “the final decision remains with the Member State’ where the investment takes place,” he said.
The EU lacks a central check on foreign takeovers, similar to the United States’ committee on foreign investment. That is slowly changing.
The European Commission last year proposed a new strategy — including a potential review of foreign direct investment screening rules — as part of a wider raft of tools that aim to bolster the bloc against foreign firms and especially state-owned Chinese companies.
