Unwanted investors

The German government has passed a new foreign trade act giving it a right of veto when foreign investors from outside the EU and the European Free Trade Association seek to acquire a stake of more than 25 percent in German companies. The Frankfurter Allgemeine Zeitung criticises the law: "Anyone who lacks the seal of approval must be prepared for the German government to start looking into their every intention. ... The grand coalition [of the social democratic SPD and the conservative CDU] has justified this encroachment into capital transactions saying that in addition to profits, some new investors could also be interested in gaining political control, and even in destroying the German economy. In such cases politicians would be not entirely helpless even without the new law. ... [For that reason] the law could become a boomerang for the Germany as an economic location. The already scant capital could ... decide to take a wide berth around Germany, which is poor in resources. Our economy has more to fear from this danger than from any harm that might be wreaked by hostile investors."

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