Increased political pressure
Sovereign funds mainly come from oil-producing countries, emerging market countries and some developed countries. For all kinds of complicated mentality, western governments are instinctively worried about sovereign funds. Generally speaking, when foreign capital tries to buy a large enterprise in western countries, whether the enterprise is of strategic significance or not, foreign capital usually faces political pressure. If the acquirer is a sovereign fund with foreign government background, and the acquired object is of great strategic significance, political concerns will be stronger. Therefore, it is not surprising that when sovereign funds enter the American and European markets on a large scale, politicians in western countries will feel uneasy and various opinions and suggestions will emerge one after another.
The United States is one of the countries that have reacted most violently to sovereign funds. The United States has two concerns about sovereign funds: First, dollar assets are the main acquisition targets of sovereign funds, and the United States is an important acquisition destination. There are many acquisition cases against American companies, and there is a continuous increase trend. Secondly, the government behavior behind sovereign funds and its trend are unpredictable. If they buy and sell on a large scale, it may affect the stability of the financial market. The representative view of the United States is that sovereign funds may become a weapon for political and economic intervention in other countries. Although sovereign funds have not made waves in the recent global financial turmoil such as subprime mortgage, the sudden large-scale selling of assets by sovereign funds and their withdrawal from companies in crisis may become one of the root causes of global financial turmoil in the future. Many people in the United States believe that sovereign funds may become destructive forces in global finance, but they may also become constructive forces.
Recently, the debate within the European Union about whether to restrict sovereign funds from investing in Europe has intensified. Obviously, the debate within the EU has clearly expressed political concerns about sovereign funds, which has worsened the investment environment of sovereign funds. At present, EU countries have been divided into two factions, one supporting the establishment of restrictions on sovereign funds investing in the EU, and the other opposing it.
Germany is a restrictive country in the European Union, and the attitude of the new German government towards sovereign funds tends to be conservative. Chancellor Merkel has warned many times recently that sovereign funds controlled by foreign governments may bring risks. Merkel believes that sovereign wealth funds are often driven by "political or other motives", rather than simply investing for the purpose of investment return like private investment funds. Therefore, "how do we deal with the funds in the hands of the government?" She said that the issue of controlling sovereign funds' investment in EU countries will be put on the EU agenda and promoted as an important issue during the remaining term.
France, Italy, the Netherlands and other EU countries also hold similar positions, arguing that the investment and acquisition of sovereign funds in Europe may harm the strategic interests of the EU and support certain restrictions on sovereign funds. The World Bank and the International Monetary Fund also responded to the political concerns of western countries, calling on sovereign funds to disclose more comprehensive information to alleviate the concerns of developed markets about their purchasing power.
Relatively speaking, Britain is a relatively moderate country on the issue of sovereign funds. Alistair darin, the British Chancellor of the Exchequer, said in a recent speech in London that Britain has always benefited from and will continue to welcome investment in the UK. "This is a sign of our success. Opening up will help us reduce the inflation rate and maintain economic and employment growth. " He said that Britain will oppose the adoption of a unified policy within the EU to review the acquisition of foreign companies. Darling also said, but investment should be two-way. "some countries need to realize that long-term investment will be difficult unless there is a' two-way road' ... free trade is like this."
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