Policy Brief: Emerging Market Multinationals: Opportunity or Threat for Europe?

1. The European Union (EU) must adjust to the changing global balance in terms of a different set of competitive forces (’Shifting Wealth’), especially to challenges from emerging market multinationals. 2. In the context of indebtedness of member state economies and given the will to promote reindustrialization of these economies, investments from emerging market multinationals are key. 3. Given the fundamental importance of the home country state for emerging market multinationals, it is unrealistic to demand a hands off-approach, but there are legitimate concerns with regard to the protection of intellectual property rights and market access that have to be addressed in investment agreements. 4. Based on the changed distribution of power after the Lisbon Treaty, the European Parliament should become more active in the field of investment policies, in particular to safeguard core pillars of the European social model. 5. EU member states should have more leeway in developing specific promotional policies at the sector level to attract innovative Foreign Direct Investment (FDI) from emerging market multinationals. So, EU competition and state aid policies need modification. 6. The EU should engage in training programmes (similar to ERASMUS) for mangers from emerging markets to ensure that positive impact of investments in the EU are realized. 7. Eurostat should collect more comprehensive data on FDI from emerging market multinationals and its effects, based on cooperation with the OECD, UNCTAD and statistical offices in emerging markets.