The European Commission has asked France to explain a decree that shields some sectors from foreign takeovers of French firms, saying it could be viewed as protectionist, a commission spokesman said yesterday.
"We believe four elements of this decree are not in line with what they should be," said Oliver Drewes, spokesman for EU Internal Market Commissioner Charlie McCreevy.
Mr McCreevy's job is to ensure there are no barriers to free movement of capital within the European Union which groups 25 member states. "We are asking clarification about these four elements and giving France a month to reply," Mr Drewes said.
The decree means foreign investors who want to take a significant stake in French companies operating in 11 sensitive sectors, from defence to cryptology, must seek French authorities' approval first.
Mr Drewes said the letter had been sent in recent days but no reply has been received so far.
A key concern is that a takeover authorisation procedure only applies to foreign firms and not to French firms.
There are also "unclear criteria in the law for defining the national interest", and the EU executive wants to know why sectors such as casinos are considered to be of strategic national interest.
