EU to Issue Key Tech List Amid Concerns Over Wider State Aid Use

By Bloomberg

Oct 03, 2023

image is BloomburgMedia_S1XZV7T0G1KW01_03-10-2023_12-00-10_638318880000000000.jpg

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Some European Union officials and diplomats worry that a new list of critical technologies being unveiled Tuesday could be used as a back door to widen the scope of state aid policies that mostly benefit larger member states.

The European Commission is publishing a list of key technologies that it plans to support and to protect from potential military use, according to people familiar with the matter.

The move is part of a broader economic security strategy that has seen the EU and its allies develop plans to ensure that advanced technologies don’t end up in the wrong hands and reduce dependency on single suppliers such as China — a push that became much more urgent after Russia’s invasion of Ukraine.

Four technologies — advanced semiconductors, artificial intelligence, quantum computing and biotechnologies – will be prioritized as the most sensitive, Bloomberg previously reported. 

On these areas, the EU will conduct broad risk assessments in cooperation with member states by the end of the year to determine potential next steps, which could eventually include the future use of export controls and outbound investment screenings. There is no automatic or immediate use of any such tools, said the people, who spoke on condition of anonymity.

The risk assessment, which is not country-specific, will also determine the extent of any vulnerabilities, and where to draw the line with each of the four technologies and their subsets, the people said.

The EU’s executive arm will then decide with member states on how to proceed with the other technologies, the people said.

That broader list includes:

  • advanced connectivity, navigation and digital technologies
  • advanced sensing technologies
  • space and propulsion, including hypersonic
  • energy, including nuclear fusion
  • robotics
  • advanced materials, manufacturing and recycling technologies

The commission was split on the breadth of the list and some officials would have preferred to stick with a narrower scope at launch, one of the people said.

That’s because listing the additional technologies could be used as a path to allow companies operating in those industries to receive state aid, the people said.

Such a move would distort the single market, because it would benefit mostly large member states, such as France and Germany, over smaller nations that don’t have the billions of euros required to match the support.

It also risks sending the wrong signal to investors who may worry that the EU could one day curtail those technologies and unnecessarily antagonize Beijing, one of the people said.

Several nations, including the US, have already introduced restrictions on trade with China on several of the more sensitive technologies.

©2023 Bloomberg L.P.

By Alberto Nardelli , Jorge Valero

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