Italy is looking out for itself… Over the past years, the government’s special powers to intervene in business dealings to protect the nation’s strategic assets have been expanded. The Mario Draghi-led executive expanded the scope of the relevant sectors, while the European Union’s Foreign Direct Investment Regulation (and a Giorgia Meloni-era law) sharpened its teeth.
… increasingly so. As a result, there has been a “significant increase” in the number of transactions flagged to the government since 2020. The latest report concerning the Golden Power, delivered to Parliament on Wednesday, indicates that a total of 608 transactions were flagged in 2022. That’s up from 83 in 2019, to 342 in 2020, to 496 in 2021.
- The numbers confirm the upwards trend that follows Rome’s heightened attention on foreign economic influence, especially in the aftermath of the Covid-19 pandemic, when the EU Commission had warned member States to be vigilant so as to prevent the loss of critical assets, resources and tech.
A closer look. Over half (314) of the flagged operations did not fall into the remit of Golden Power’s application, testifying to “an often precautionary use of the notification tool,” as the report noted. Still, most of them (519) concerned strategic sectors, including energy, transport and communications; 71 were about defence and security, and 18 involved 5G technology.
- Data demonstrates that the government only considers triggering the special powers as a last resort move, reads the report. Total instances of intervention amount to 4% of all the flagged cases (that’s 8% when considering the Golden Power-relevant operation only).
Where did the government(s) intervene? Only one operation was full-out vetoed: that concerning Robox, a robotics company willing to share the licensing of its machine’s source codes to China’s government-linked Efort Intelligent Equipment. The veto also ended up preventing the latter from raising its stake in the former to 49%, up from 40%.
Protecting strategic know-how. In three more cases, all relating to either Beijing or Moscow, the government elected to oppose purchase transactions. One of them stands out: that of Alpi Aviation, a drone maker that had passed, in violation of Italian law, into the hands of two State-owned Chinese groups. As Italy’s financial corps explained at the time, the acquisition was not about investing but rather acquiring technological and military know-how. Thus, the Draghi government triggered the Golden Power to cancel the takeover and require the Chinese company to sell its shares in Alpi Aviation within a year.
- “The transaction was deemed likely to harm essential Italian and European interests related to the defence and security sectors, as well as to result in the transfer of know-how, including through special joint ventures, in the non-Italian/European sphere.”
More still. The Draghi government also stopped a subsidiary of the Russian nuclear giant Rosatom from purchasing the quasi-totality of Faber Industrie, a world leader in the design and production of cylinders and systems for high-pressure gas storage. And later, the Meloni executive acquired the entire share capital of Tecnologia Intelligente, an Italian company, from the Dutch company Nebius (a spin-off of Russia’s Yandex).
