BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

BRUSSELS — The European Commission appears to be slow-walking a decision to take action against Italy over its controversial use of national security powers to stall a banking merger between UniCredit, the Milan-based bank, and its crosstown rival BPM.  Officials at the competition and financial services directorates handed in their assessment of the case weeks ago to President Ursula von der Leyen’s Cabinet, but have yet to hear back, five people familiar with the matter told POLITICO. The assessment is not in favor of Rome, said one of the people, granted anonymity to discuss a private matter.  Commission insiders speculate that the delay has to do with broader political bargaining at the highest level between Brussels and Rome. According to another of the people, von der Leyen is taking care not to annoy Giorgia Meloni because she needs the Italian premier’s support to shore up the increasingly shaky political coalition that backed her for a second term last year. Earlier this year, Italy decided that UniCredit’s €10 billion takeover of BPM was a threat to national security. Under the government’s rules on screening foreign direct investments — known as its “golden power” — Rome imposed conditions on April 18 that effectively prevented UniCredit from completing the deal. The Commission opened a so-called EU Pilot procedure — carried out by its financial services directorate — to determine whether the use of national security measures in a bank merger is in line with EU banking regulations and single-market freedoms. The process can ultimately lead to an infringement procedure — as happened when the Spanish government obstructed BBVA’s acquisition of Catalan bank Banco Sabadell. The Commission’s competition directorate gave a conditional green light to the deal on June 19. A month later it warned Italy that by applying the golden power to a domestic deal, Italy may have violated merger rules as well as other provisions of EU law. The Commission is currently assessing Italy’s replies in both investigations, a spokesperson for the EU executive said. GOLDEN POWER The golden power equips Italy with wide-ranging screening tools to curb bids on national champions by foreign investors that are deemed risks to national security, such as those from China. The use of the tool to derail a domestic merger appeared to flout the EU’s push for greater banking consolidation across Europe — which it sees as necessary for the continent’s financial sector and for the economy more broadly — to compete with U.S. rivals. The largest American bank, JP Morgan, has a market capitalization more than four times that of its nearest European counterpart, Santander. Banking and Financial Services Commissioner Maria Luís Albuquerque has repeatedly spoken out in favor of banking consolidation across the bloc.  The competition and financial services teams had their assessment of the case ready shortly after Italy submitted its last round of responses to the Commission in August, said one of the people who spoke to POLITICO. But von der Leyen’s Cabinet, which ultimately has to sign off on a decision, has taken no action so far, they added. According to Italian media reports, Italy has been trying to buy more time and stave off an infringement procedure by suggesting it could amend its golden power legislation. Financial daily Milano Finanza reported on Tuesday that the Commission has set Nov. 13 for a decision. An Italian official with knowledge of the file said the Commission could very well be slow-walking action against Italy given that Unicredit’s withdrawal from the deal is by now irreversible. | Emanuele Cremaschi/Getty Images An Italian official with knowledge of the file said the Commission could very well be slow-walking action against Italy given that Unicredit’s withdrawal from the deal is by now irreversible. That would allow time to review whether Italy’s golden power is in line with EU competition rules without the pressure of a live deal. “A medium-term, out-of-the-spotlight agreement on golden power could be the best outcome,” this official explained. Reuters, citing sources familiar with the matter, reported last week that Italy could be willing to amend its golden power to address the Commission’s concerns over how it was used in the Unicredit-BPM case. All matters pertaining to the golden power are steered from von der Leyen’s office, said another Commission official who is not directly involved in the matter and was also granted anonymity to speak candidly. It is usually quite simple to perform a technical analysis of such files, but “politics always trumps it,” they added.  Spokespeople for Meloni and Italy’s economy ministry declined to comment.

Steven Everts is the director of the EU Institute for Security Studies. This article is based on a new report called “Unpowering Russia: How the EU can counter the Kremlin.” The EU faces a Russian threat that goes well beyond Moscow’s war against Ukraine. Every day, the Kremlin’s actions harm European interests in key regions and domains. Yet, the bloc struggles with how to respond, trapped between overestimating Moscow’s strength and underestimating its hostility. According to a new report by the EU Institute for Security Studies, what Europe needs is a strategy not just of containment or building resilience but of “unpowering Russia” — systematically reducing the Kremlin’s ability to harm the bloc. Let’s be realistic: Yes, Russia is a global power that can, and does, hurt core EU interests. But it is also losing economic, diplomatic and demographic ground. Its “unlimited partnership” with China is becoming increasingly unbalanced with Beijing calling the shots. Much of the so-called global south remains wary of becoming pawns in its geopolitical games. And around the world, it often has to compensate for strategic weaknesses with bravado and improvisation. However, Moscow’s danger lies precisely in its agility. It can meddle with European democracies, fuel instability in Africa and the Middle East, and support authoritarian regimes around the world with only modest resources. It is time the EU pushes back — and hits the Kremlin where it hurts. One of the most immediate threats the EU could tackle is Russia’s so-called “shadow fleet”—tankers carrying oil through European waters under murky ownership, dodging sanctions and funding Russian President Vladimir Putin’s war machine. The bloc could act without delay by aggressively policing territorial waters and exclusive economic zones, especially in the Mediterranean, Baltic and North seas. If ships lack valid insurance or pose environmental risks, it should seize them or turn them away. This is about enforcement — not escalation. It is legal, effective, and it would turn the tables on Russia’s hybrid tactics. The EU needs to act smarter on deterrence as well. This means not being intimidated by Russia’s repeated nuclear threats and bluffs, instead focusing on ramping up practical military aid for Ukraine — from artillery to drones and other scalable systems — without telegraphing its moves in advance for Moscow to manipulate. Then, there’s China. As Beijing and Moscow draw closer, the EU should start using economic leverage — whether by tightening investment screening or threatening targeted export freezes on dual-use goods. Europe’s diplomacy should also continue to expose the contradiction between China’s stated respect for sovereignty and its indulgence of Putin’s imperial revanchism. Next, there’s the battle of narratives. Russia’s information warfare may be cheap, but it’s effective, flooding airwaves with lies, fueling discontent and manipulating debate. Meanwhile, Europe’s response has been fragmented and timid. This should end. The bloc needs a real strategic communications capacity to empower initiatives like EUvsDisinfo, support independent media in vulnerable regions, and work in local languages. The message? Democracy, self-determination and sovereignty aren’t Western concepts. They’re universal principles — and Russia tramples them. Finally, the EU needs to deepen its regional engagement in order to crowd out Russia’s influence. As Beijing and Moscow draw closer, the EU should start using economic leverage — whether by tightening investment screening or threatening targeted export freezes on dual-use goods. | Yuri Kochetkov/EPA In the Western Balkans, this means rewarding reformers and punishing obstructionists, possibly in smaller groups of the willing if there’s no bloc-wide consensus. In the Southern Mediterranean, it means cooperating with Turkey to resolve conflicts that Russia exploits. In Africa, it means pivoting from crisis response to truly becoming the oft-claimed “partner of choice” by investing in joint efforts on infrastructure, education and critical raw materials, while backing the continent’s agency in global governance forums. And in the Indo-Pacific, it means playing to Europe’s strengths as a reliable partner that’s open to trade and collaboration on the issues and challenges that will shape the future: cyber, AI and clean tech. In all these regions, the EU must also go beyond the circles already familiar with it, such as governments and businesses, and invest in building ties with civil society and future leaders. The main conclusion here is that Europe is far from powerless — it is simply under-leveraged. The EU has diplomatic reach, economic heft, security tools and a track record of seeking partnerships rather than establishing spheres of influence. However, it needs to use these assets with alacrity and strategic intent. If it is to “unpower” Russia, the EU must think and act in terms of power — and have the courage to use it. Most importantly, the EU doesn’t need anyone else’s permission to do this. It can seize oil tankers, expose falsehoods and show up in places Russia has long taken for granted. Unlike so many other things in Europe, “unpowering” Russia won’t start with a grand summit — it will start with action. The Kremlin already plays the game. It is time the EU played it better.

PARIS — American investors were souring on Europe even before Donald Trump returned to the White House. A study released by consultancy EY on Thursday found that investment by U.S. companies in Europe fell by 24 percent from 2023 to 2024. Over the same period, foreign investment into the United States increased by 20 percent. Several of the surveyed companies said they chose to invest in the United States because of subsidies and tax breaks such as the ones afforded to them by the $369 billion Inflation Reduction Act and lower energy costs — factors that were “almost irresistible,” according to Marc Lhermitte, the EY partner in charge of the study. Lhermitte said that during the same time period, American investors were spooked by geopolitical tensions, spiking energy costs and sluggish growth. The coronavirus pandemic and the rise of energy prices set off by Russia’s invasion of Ukraine have plunged Europe in period of industrial decline. “A region with no growth during three years is exhausting,” Lhermitte said. The situation is likely to get worse, especially with Trump’s threat to raise across-the-board tariffs on European goods from 10 percent to 20 percent as he seeks to convince foreign companies to produce more goods in the United States.  “Companies tell us that this is a major reason for concern,” said Lhermitte. Many of the surveyed companies agreed with Mario Draghi’s call for massive private and public investment to help Europe compete with China and the U.S.. An official from the cabinet of French trade minister Laurent Saint-Martin said France registered a “positive result” and insisted that the decline of U.S. investments in Europe was part of a broader wave of reshoring and “regionalization of supply chains.” FRANCE ON TOP Despite a year of political instability, the study showed that France remained Europe’s most attractive country for foreign investors in 2024. But Paris has little reason to celebrate: the study found that foreign investment in France dropped by 14 percent year-on-year. French President Emmanuel Macron is expected to announce several major foreign investments on Monday during the annual “Choose France” summit. The event, which takes place at the Versailles palace, is expected to draw CEOs from companies from all over the world. Giovanna Coi contributed to this report.

Europe is getting twitchy about who owns its ports, with mounting anxiety driven by the outsized footprint of Chinese firms across the bloc’s maritime gateways. Transport Commissioner Apostolos Tzitzikostas on Thursday told industry leaders that Europe’s ports must “reconsider security … and examine foreign presence more carefully.” It was one of the clearest signals yet from Brussels that what once was seen as a benign investment is now starting to look like a security liability. The Commission’s recent defense white paper echoed that concern by floating the idea of stricter controls on foreign ownership of “critical transport infrastructure.” That unease is mirrored in a draft paper from the Socialists and Democrats in the European Parliament, seen by POLITICO, which calls for tougher rules in the upcoming overhaul of the EU’s foreign investment screening regulation. Neither Tzitzikostas nor the S&D mentioned China by name, but the subtext wasn’t exactly subtle. Simon Van Hoeymissen, a researcher at Belgium’s Royal Higher Institute for Defense, said the language likely nods to Beijing’s expanding hold over key European ports — from Antwerp-Bruges and Rotterdam to Piraeus in Greece. Chinese giants COSCO and China Merchants, as well as Hong Kong-based Hutchison now hold stakes in more than 30 terminals across the EU. ‍“The reality is clear,” said Ana Miguel Pedro, a Portuguese MEP with the center-right European People’s Party. A member of the Parliament’s Seas, Rivers, Islands & Coastal Areas Intergroup, she warned that “foreign state-driven actors like Beijing are operating with a level of coordination and intent that far exceeds the fragmented response of individual countries.” Pedro argued COSCO isn’t behaving like a typical market actor but is taking orders from the Chinese Communist Party. “Its growing presence in ports is not just an economic concern,” she said. “It’s a strategic vulnerability.” The EU is starting to see it that way, too. “Russia’s invasion of Ukraine and China’s unofficial support for Russia have only heightened concerns about the security of the EU’s ports,” says a recent report from the Warsaw-based Centre for Eastern Studies think tank. Transport Commissioner Apostolos Tzitzikostas on Thursday told industry leaders that Europe’s ports must “reconsider security … and examine foreign presence more carefully.” | Marcin Obara/EPA One example of the kind of strategic entanglement the EU is now confronting is playing out in Poland, at the Gdynia Container Terminal, where Hutchison has held a stake for over 20 years. That situation could change. Under pressure from U.S. President Donald Trump, who wants Chinese-linked companies out of the Panama Canal, Hutchison is negotiating a $23 billion sale of port properties worldwide, including 14 in Europe, to a consortium led by BlackRock and including Mediterranean Shipping Company. However, that deal hit a wall in March after Beijing intervened. What makes Gdynia especially revealing isn’t just the trade it handles — it’s what sits next door: a naval base, a shipyard, and the headquarters of Poland’s elite naval special forces, meaning that whoever runs the terminal holds a front-row seat to European and NATO military logistics and defense operations. Recognizing the strategic significance, the Polish government has listed the terminal as critical infrastructure, meaning the operator has to work closely with the government on security. This high-stakes backdrop sharpens the edge of Pedro’s warning — and underscores why the EU is now reassessing foreign involvement in its ports with renewed urgency. “If a foreign adversary exploits a vulnerability in one European port, it jeopardizes all of us,” she said. “In today’s world, we cannot afford strategic blindness while others act with full visibility and intent.”

BRUSSELS — The EU’s attempt to stop China from buying out its top chipmakers and AI companies is being hollowed out from within.  National capitals are pushing to weaken rules that would require them to screen foreign investments in sensitive technologies, such as semiconductors or artificial intelligence, according to the latest draft compromise text on the review of the rules governing foreign direct investment (FDI) screening seen by POLITICO.  The FDI review is part of a signature initiative from European Commission President Ursula von der Leyen’s first mandate: a new economic security strategy for the EU. As part of the agenda she proposed to revamp rules in January 2024 governing how EU countries scrutinize inbound investments.  The strategy comes as part of a broader EU-wide effort to rein in foreign investors from taking control of European companies in strategic or sensitive sectors, such as when Chinese shipping giant Cosco attempted to buy a container terminal in the Port of Hamburg two years ago. The draft document waters down the original Commission proposal by narrowing the list of strategic sectors subject to mandatory FDI screening, where the EU executive said that EU countries would be required to screen foreign investments into AI, chips, quantum technologies, energy technologies, space, drones or critical medicines. But while it adds more detail — explicitly naming “core components or software of semiconductor manufacturing equipment,” lithography, microprocessors and memory chips — the new Council text stops short of requiring national authorities to act.  Instead, the new text, dated April 14, only recommends that EU governments “take [those sectors] into consideration” when assessing whether a foreign investment poses a threat to security or public order.  By contrast, in its own position on the rules, the European Parliament doubled down on the Commission’s original intent — seeking to add more sectors that capitals must monitor such as aerospace, rail transport or the automotive industry. Diplomats from national capitals do not expect their final position to significantly change before institutions enter into negotiations to finalize the legislation. Agreeing on which sectors should be subject to screening will likely be the most contentious aspect of those talks.  The latest draft, which was discussed by EU trade diplomats last week, comes after POLITICO reported that capitals wanted to ditch the list of sensitive sectors altogether during the Hungarian presidency of the Council of the EU in the second half of last year. TRUMP’S SHADOW While the rules were drafted amid fears of Chinese takeovers, the European Union is currently more worried about corporate acquisitions by U.S. companies — such as American private equity CD&R buying a subsidiary of French paracetamol-maker Sanofi, or the failed attempt by American industrial machinery giant Flowserve to acquire control of French nuclear firm Segault in 2023.  Now that Trump is in power, the EU executive is clearly worried.  Chinese shipping giant Cosco attempted to buy a container terminal in the Port of Hamburg two years ago. | Caroline Brehman/EPA “We cannot afford discussing this for months and months,” said Damien Levie, who heads the FDI screening unit at the Commission’s trade department, citing a changing global security environment in which, for example, the United States is no longer “unequivocally” on the EU’s side.  Levie said at an event last week that he hoped member countries would be in a position to agree “in the coming weeks” on a Polish presidency proposal of the text, which “fine-tunes” an earlier proposal by the Hungarians.  INVESTING FROM SCRATCH Another substantial difference compared to the Parliament’s position is that EU countries want to remain free to decide whether to include so-called greenfield investments in their mandatory screening — which is when a foreign company sets up an entirely new operation in the EU, like building a factory from the ground up. “Greenfield foreign investments should fall within the scope of this Regulation. However, they should not fall within the minimum scope of screening mechanisms,” adds the text, prepared under the current Polish presidency. The Parliament’s own position — set to be voted on May 7 in the plenary — states that EU countries should screen greenfield investments in sensitive sectors. European lawmakers also sought to give the European Commission an adjudicatory role when an investment is disputed between capitals. In their own position, EU capitals don’t give the EU executive such a role. The draft text is still subject to change before countries adopt their position. This story has been updated with comments from Damien Levie of DG TRADE.

PARIS — French President Emmanuel Macron wants EU businesses to stop investing in America in response to U.S. President Donald Trump’s massive tariffs. “It is important that future investments, the investments announced over the last few weeks, should be put on hold for some time until we have clarified things with the United States of America,” Macron said on Thursday as he hosted a meeting with representatives of the sectors impacted and the government at the Elysée palace. “What message would we send by having major European players investing billions of euros in the American economy at a time when [the U.S.] are hitting us?” Macron continued, calling for “collective solidarity.” Macron’s comments are seen as an attempt to dissuade French tycoons from cozying up to Trump, potentially to try to cut private deals, outside regular EU trade policy. Earlier this month Trump announced that French shipping giant CMA CGM intended to invest €20 billion in the U.S. In January, meanwhile, Bernard Arnault, the head of luxury goods giant LVMH, said he was considering increasing investment in the U.S. and lauded Trump’s economic policy. On Wednesday the Trump administration slapped the EU with 20 percent tariffs on all exports to the U.S. in what Macron called “a brutal and unfounded decision.” The French president said Trump’s tariffs confirmed that France had been right to push for a tougher trade policy and stronger trade defense instruments. “We need to continue to accelerate at the European level with an agenda of trade protection,” Macron said, citing EU duties on Chinese vehicles as an example of how the EU can up the pressure on its economic rivals. “We are not naïve, we are going to protect ourselves,” Macron said, referring to the trade war with the U.S. On top of retaliatory tariffs, Macron said, Brussels should consider using the EU’s so-called anti-coercion instrument against the U.S. — a new tool in the bloc’s trade arsenal that was conceived to hit countries like China — and also take measures hitting American Big Tech. “Nothing is ruled out, all tools are on the table,” Macron said.

PARIS — The French government on Monday warned an American private equity firm purchasing a subsidiary of pharmaceutical giant Sanofi that it would face millions of euros in penalties if it tried to move jobs or drug production outside of France. The firm, CD&R, is attempting to acquire control of Sanofi subsidiary Opella, which manufactures over-the-counter drugs like paracetamol. Sanofi announced on Monday that it had entered exclusive talks with CD&R for the firm to buy 50 percent of Opella’s shares for around €16 billion. News of the potential deal sparked widespread criticism from across France’s political spectrum when talks were announced earlier this month, with politicians warning it could threaten manufacturing jobs in France and fall afoul of Europe’s post-pandemic push to secure its supply chains for critical medicines. Sanofi said it was selling Opella as part of its effort to focus on vaccines and innovative drugs. The French government responded to the backlash against the deal with a warning against offshoring jobs and production, but Paris is keen on the takeover. On Sunday evening, the government announced the various stakeholders had sealed an agreement requiring Opella to keep production, jobs and management in France after the American takeover. “To ensure that these guarantees are respected with the utmost rigor and firmness, [there will be] firm, immediate and far-reaching sanctions,” Economy Minister Antoine Armand told reporters on Monday morning as he presented the deal alongside Industry Minister Marc Ferracci. Under the trilateral deal signed by Sanofi, CD&R and the government, Opella will have to pay a €40 million penalty if it stops production in two of its factories that produce popular medicines like paracetamol, marketed by Sanofi in France’s omnipresent yellow boxes of Doliprane, and drugs to treat allergy and digestion problems. Workers at the two factories have been on strike since news of the American takeover broke, as they feared for their jobs. Under the deal, Opella will have to pay a €100,000 penalty for every single economic-related layoff. The biggest sanctions aim to preserve Opella’s relations with French suppliers. The pact requires Opella to purchase the active ingredient for the production of paracetamol from a future French factory to be opened by Seqens in 2026. Opella will have to pay €100 million penalty if it doesn’t keep that promise. The French government, via public investment bank Bpifrance, will also buy shares of Opella for up to €150 million to have more visibility on company strategy, but their stake amounts to just a percent or two of ownership. The Economy Ministry expressed confidence that the agreement’s strict punishments would help promote France’s strategic objectives of reshoring medicine production and keeping manufacturing jobs in the country — while also bringing in a bit of foreign cash as well. CD&R committed to invest €70 million in Opella’s French operations over the next five years and to keep the company’s headquarters and research and development activities in France.

PARIS ― The French government said Sunday it is backing the sale of a subsidiary of pharmaceuticals multinational Sanofi that produces over-the-counter drugs to American private equity firm CD&R after obtaining commitments to keep jobs, production and management in France. Economy Minister Antoine Armand said the government had been assured the deal, which is reported to be worth over €15 billion, won’t negatively affect the supply of essential medicines in France, including paracetamol, nor will it lead to job losses. Bpifrance, the country’s public investment bank, will take shares in Opella, the Sanofi subsidiary that is being sold to the American fund, but will not have a controlling majority. “We have obtained guarantees that Opella will remain and develop in France,” Armand said. “Our demands regarding employment, production and investment will be respected.” The takeover has proven highly controversial in France, with politicians from across the political spectrum warning it could threaten manufacturing jobs and thwart Europe’s push to secure its supply chains for critical medicines. As previously reported, however, the French government is keen on the deal. An economy ministry official told reporters Sunday evening that Paris had obtained “the highest possible level of guarantees” from the companies in a trilateral deal including Sanofi, CD&R and the government. The official spoke on condition of anonymity in line with French government communications policy. “Blocking the transaction would not have provided more guarantees,” the official said, noting that foreign buyers would bring “new investment capital” considered essential to developing France’s medicine manufacturing sector. The official confirmed that the government will now perform investment screening on the takeover. Armand and Industry Minister Marc Ferracci will present the details of the agreement reached with Sanofi and the American buyer on Monday.

PARIS — Could it be a case of all bark but no bite? Paris has threatened to use all its heft to ensure the sell-off of part of Sanofi’s over-the-counter business remains producing certain medicines in France. But, during a visit to Sanofi’s factory in Normandy on Monday, France’s economy and industry ministers seemed more focused on reassuring workers and citizens that they had little to fear from the takeover by American fund CD&R, than threatening to block the deal. In previous controversial takeovers, France’s powerful economy ministry didn’t hesitate to threaten a veto in the name of French interests. This time things looked different. Following a cross-party backlash against the deal, the two ministers traipsed out at the Lisieux paracetamol factory and announced alongside Sanofi’s top brass that the American takeover should have no impact on French jobs and medicine supplies. “We will be asking for extremely precise, strong and intangible conditions regarding what happens next,” said Economy Minister Antoine Armand as he visited the paracetamol factory with Junior Minister for Industry Marc Ferracci on Monday. The economy ministry told reporters that Paris will launch an investment screening procedure into the planned sale of Sanofi subsidiary Opella to the American private equity firm for €15 billion. The government is seeking to conclude a deal between Sanofi, CD&R and the state, to force the buyer to maintain jobs and investments in France. “We will be asking for extremely precise, strong and intangible conditions regarding what happens next,” said Economy Minister Antoine Armand as he visited the paracetamol factory. | Lou Benoist/AFP via Getty Images The two ministers promised to keep production of over-the-counter drugs in France by threatening economic sanctions if those commitments are not respected. And, if needed, the state could also buy up shares of Opella and influence the company’s decisions as a shareholder, Armand added. In a sign that Sanofi and the government are on the same page, Armand and Ferracci visited the factory with Sanofi Chair Frédéric Oudéa, a heavyweight financial services veteran who, until last year, was CEO of French bank Société Générale for 15 years. French President Emmanuel Macron also backed up this position, when asked at a separate event on Monday. “I would distinguish two things: activity in France and capital ownership,” he said, referring to commitments to maintain jobs, production and medicines in France. “On capital ownership, the government has the instruments to guarantee that France is protected. And so it’s up to the government to look at that.” But workers aren’t buying it. Employees at the Lisieux factory, which produces paracetamol, are on strike as they oppose the deal which they fear could threaten their jobs and France’s medicine supply. And French politics is on their side. On Friday, politicians from the whole political spectrum reacted with outrage to the news that Sanofi was in talks to sell a majority stake of Opella to CD&R, de facto putting Sanofi’s production of over-the-counter drugs into American hands. Big Pharmas selling off their over-the-counter drugs businesses isn’t a new concept. Back in 2018, Sanofi off-loaded its cheaper medicines business Zentiva to a U.S.-based private equity firm for €1.9 billion. The difference this time aside from the location — Zentiva was based in the Czech Republic, while Opella is in France — is that French citizens still recall harrowing memories of drug shortages from the pandemic. STRATEGIC AUTONOMY TESTED The omnipresent yellow boxes of Doliprane, the brand name of Sanofi’s paracetamol, are the most sold drug in France. Shortages of medicines, including paracetamol, during the coronavirus pandemic marked French people and fueled Paris’ push for more strategic autonomy. “Doliprane will continue to be produced in France, and not just because it’s a drug that’s popular with all French people, not just because it’s an industrial success story, but because our country’s sovereignty and the supply of sensitive and critical medicines is at stake,” Armand promised. France has been the front-runner in the European push to reshore medicine production back to the Continent and has given generous subsidies to bring to France the full supply chain of key medicines like paracetamol. The country currently produces paracetamol only thanks to the imported active ingredient. It is planning to produce the active ingredient as of 2026 in a new French factory to be opened by Seqens, also controlled by an American fund, that will supply Opella. An economy ministry official said the government will require the American buyer to keep the engagements with suppliers for several years and to buy the active ingredient from Seqens. While promising to do everything to keep medicine production in France, the French government doesn’t sound hostile to the deal. In the past, the French economy ministry publicly expressed its opposition to transatlantic takeovers, from supermarkets to nuclear components, killing off those deals. This time, however, the tone is very different; the government described the buyer as “a serious investment fund that presents positive prospects for the overall development of Opella as well as for the sites located in France.”