Germany must use protectionism sparingly

Author: Nicholas Pettifer | Published: 21 Aug 2008

Foreign investors should not fear Germany's new legislation to monitor foreign investment, but the federal government has a responsibility to apply its new powers conservatively.

Yesterday, the German cabinet approved a bill that gives the state power to scrutinise acquisitions of more than a 25% stake by entities based outside of the EU or EEA. The Ministry of Economics and Technology (BMWI) will be able to prohibit direct or indirect acquisitions that it considers a risk to the public order or security of Germany.

"It's nothing completely absurd, but it depends on how it is handled. The concept...