French patriotismcould lead it to EU court

France’s restriction of foreign shareholdings in “sensitive sectors” has triggered European Commission legal action. A controversial decree came into force three months ago. The French prime minister called it “economic patriotism” policy; critics called it protectionism. The Commission worried the provisions could discourage investment from other member states, contradicting rules on the free movement of capital.

A Commission statement said that while the 11 sectors concerned, including national defence, might require measures restricting freedoms enshrined in EU treaties, the French decree lacks the required proportionality.

Brussels questioned the inclusion of casinos, saying any security concern there should be covered by the EU’s money laundering directive. The Commission’s formal notice gives France two months to explain how the decree is compatible with EU law.

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