The European Union has planned to launch a €100 billion “European Future Fund’ to provide the much needed financial impetus to ‘high-potential European companies’ competing against US and Chinese giants. Media reported that a blueprint for the sovereign wealth fund was presented to Ursula von der Leyen, the soon-to-be president of the European Commission, to incorporate the same in her five-year plan.
France and Germany, the key European economies, have been pressing Brussels to turn the proposal in an aggressive policy to shield EU industries from the 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’.
The two has been urging the Union to relax its competition regulations to allow mergers, creating a formidable confederation.
The key agenda of the draft document was to focus on “building and strengthening the innovation leaders of the future”.
The fund was primarily proposed to combat the EU’s potential rivals including the US tech companies known as “Gafa” (Google, Apple, Facebook, and Amazon) and China’s “Bat” (Baidu, Alibaba, and Tencent), who ‘manage the global digital agenda’.
Europe’s biggest fear is that it doesn’t have such companies, who command the digital space as Gafa or Bat. It adds risk to Europe in terms of growth, jobs and gaining influence in key strategic sectors.
Von der Leyen, who would join the Commission’s office on November 1, has committed to “invest in innovation and research, redesign our economy and update our industrial policy”. However, the Commission’s spokesperson Mina Andreeva clarified in a briefing on Friday, that the European Future Fund proposal was a product of internal brainstorming and shouldn’t be confused as a part of the EU formal policy programme. She added, “This leaked document should, therefore, be given zero credence.”