Germany: foreign investment and the Federal Government

On Wednesday of this week, Germany's Cabinet approved legislation which will, if passed, give the Federal Government the right to veto investment in a German company of 25% or more from outside of the EU or EFTA if it is believed that the investment represents a risk to national security. According to a report in the UK's Financial Times newspaper:

The bill is a reaction to concern in Berlin about the growing weight of state-controlled sovereign wealth funds, the vast investment pools created to manage the currency reserves of fast-growing economies in Asia, Russia and the Middle East. Wednesday’s endorsement by the cabinet marks a significant milestone for the controversial draft, which will now move to parliament for final approval. The decision ends almost a year of protracted work on the text to address fears that it may contravene European Union legislation on the free movement of capital".