(Updates with European Commission response)
PARIS, July 10 France has won EU backing for a
decree allowing the government to block foreign takeovers of
French companies in strategic industries, its economy minister
said on Thursday, but the European Commission cautioned it would
monitor the law closely.
In a surprise move, the government widened in May its
control over mergers in industries deemed key to France's
national interests as General Electric was seeking to buy
the energy assets of French group Alstom.
"The European Commission in recent days notified the French
government of its approval of the decree as perfectly in line
with European treaties," Arnaud Montebourg said in a speech.
"It was used in the General Electric-Alstom case. It will be
used again in certain sensitive sectors such as water, health,
national defence, gaming, transport, energy and
telecommunications," the economy minister said.
Chantal Hughes, spokeswoman for the bloc's financial
services chief Michel Barnier said the Commission, the EU's
executive body, was in contact with French authorities over the
issue and had taken "note of the law".
"We recall restrictions on free movement of capital can be
justified if the objective pursued is one of public policy and
public security. Any action taken to restrict free movement
needs to be proportionate and serve the public interest," she
said in a statement.
"We will closely monitor any use of the law, i.e.
systematically monitor any application of the investment
screening legislation, and check in particular that it is not
used to achieve purely economic objectives."
(Reporting by Ingrid Melander and Foo Yun Chee in Brussels;
writing by Leigh Thomas; Editing by Gareth Jones)