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After a period of negotiations, the Council of the European Union and the European Parliament have reached political agreement on the text of a draft regulation on foreign subsidies that, in certain cases, are distorting the internal market.

This proposal aims to ensure a level playing field in the internal market. This draft regulation is an important next step that follows the Commission's publication of a White Paper on distortive subsidies in June 2020. The White Paper set out several approaches to address distortive effects caused by foreign subsidies. The proposal is part of the broader EU 2020 industrial strategy driven by the principle of ‘enhancing strategic autonomy.’