Brussels, 08/11/2012 (Agence Europe) - The Greek legislation (No3631/2008), which relates to prior acquisition of voting rights representing over 20% of the social capital of certain strategic public limited companies quoted on the stock exchange, and which provides for ex post control in relation to the taking of certain decisions that are vital for those companies, runs counter to the freedom of establishment and to the free movement of capital. The scheme confers a discretionary power on the administration which is not easily amenable to judicial review and involves a risk of discrimination.
With its ruling of Thursday 8 November in Case C-244/11, the EU Court of Justice rules in the Commission's favour. The Commission had initiated proceedings for failure to comply with obligations in 2011. It reproached the Greek law for having created obstacles likely to discourage operators from investing in such companies and to restrict, through ex post control by the Ministry of the Economy on certain decisions, effective shareholder participation in the management and control of the said companies, thus hampering their establishment in Greece. According to Greece, the scheme was to apply not to companies already privatised in which the State retained golden shares but to strategic companies not yet privatised (six monopolies or former public monopolies in the telecommunications, water, electricity and port management sectors), thus falling outside the scope of the fundamental freedoms.
In its ruling, the Court specifies first and foremost that, when the State decides to transform public undertakings into public limited companies whose shares are quoted on the stock exchange and may be purchased freely on the market, it cannot subsequently invoke the rule on the protection of private property to remove such acquisitions from the ambit of the fundamental freedoms by making them subject to an authorisation scheme. The Court's examination then related to the justification for the restrictions on the freedom of establishment in the light of the objective, invoked by Greece, of ensuring the continuity of basic services and the operation of networks necessary to economic and social life (energy, water, telecommunications, etc.). It points out that the security of energy supply can only be relied on as a justification if there is a genuine and sufficiently serious threat to a fundamental interest of society. Under Greek law, the prior authorisation is applied without a risk, even a potential risk, of interference with the security of supply having been established. Furthermore, the restriction on the exercise of voting rights applies not only to decisions capable of threatening the objective of the law in specific respects, but to all those taken by shareholder vote. Finally, the Court judges that both the prior authorisation and the ex post control leave the national authorities with a measure of discretion that is too exhaustive and not easily amenable to judicial review. In the first case, the criteria are too imprecise and general, while, in the second, the circumstances justifying opposition are “potentially numerous, undetermined and indeterminable”. (FG/transl.jl)