Global Economy

EU drafts plan for hundred billion-dollar fund to take on US tech firms, reports say

Ursula von der Leyen, incoming president of the European Commission, left, speaks during news conference at the European Parliament, in Strasbourg, France, on Tuesday, July 16, 2019.

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European Union officials drafted a plan to launch a sovereign wealth fund to invest in companies that could compete with U.S. and Chinese tech giants, according to reports in the Financial Times and Politico.

The reports, citing an internal document, said EU officials have drafted a document for a “European Future Fund” that would invest 100 billion euros ($110 billion) in “high-potential European companies.”

The proposal would mark a drastic step from the EU to try to encourage companies within the continent to catch up with competitors from the U.S. and China. The FT said the document specifically named threats from U.S. tech giants Google, Apple, Facebook and Amazon and Chinese firms Baidu, Alibaba and Tencent.

“Europe has no such companies,” the FT quoted the document as saying. “This presents a risk to growth, jobs, and to Europe’s influence in key strategic sectors.”

It is unclear whether the proposal would gain traction among EU member states.

European Commission Chief Spokesperson Mina Andreeva said in a briefing Friday the plan had not been seen by president-elect Ursula von der Leyen. She said “draft internal brainstorming documents” should not be confused with policies.

“This leaked document should therefore be given zero credence,” Andreeva said.

While Europe lags behind the U.S. and China as a home for big tech companies, the region has taken on a leading role regulating the industry. Analysts expect new officials at the EU will maintain a tough stance on tech giants when it comes to issues like data privacy, antitrust and taxation.

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