EU tightens foreign investment screening to protect strategic assets 

The EU has struck a political deal on a major overhaul of its foreign direct investment screening rules, stepping up protections for strategic technologies and critical infrastructure against hostile takeovers. 

Announced by the Council, the agreement is a core pillar of Commission President Ursula von der Leyen’s economic security agenda and comes just days after Brussels unveiled a broader package aimed at shoring up Europe’s strategic autonomy.

Under the new framework, all Member States will be required to systematically screen foreign investments, with procedures more closely harmonised at EU level. Mandatory screening will cover dual-use and military sectors, as well as sensitive technologies including artificial intelligence, quantum computing and semiconductors.

The scope of scrutiny also extends to raw materials, energy, transport and digital networks, alongside electoral infrastructure such as voting systems and databases. Certain financial services will also fall under the regime and be subject to national review.

Danish Minister for Industry, Business and Financial Affairs Morten Bødskov said the deal delivers “a balanced and proportionate framework,” focused on the most sensitive assets while remaining efficient for authorities and predictable for businesses. Securing the reform was a key priority of Denmark’s Council presidency and required three rounds of negotiations between the Commission, Parliament and Member States.

Talks were particularly fraught over which sectors should face mandatory screening and how much power the Commission should wield in cross-border disputes. Despite pressure from the Parliament, Brussels will not gain arbitration powers: final decisions on investments will remain firmly in the hands of national governments.

European Parliament rapporteur Raphaël Glucksmann (S&D) welcomed the agreement as a clear step forward. “The negotiations strengthen Europe’s security while simplifying life for investors through greater harmonisation,” he said. But he warned that the EU must still ensure foreign investments deliver real added value, rather than turning the single market into “a playground” for companies exploiting Europe’s technological dependencies. The Commission, he added, now needs to move quickly.