Mr Bolkestein, the European Parliament and institutional balance. Frits Bolkestein's initiative to create a "high level expert group" to relaunch European regulations on "takeover bids", and then on company law in general, deserves to be underlined. The way in which the draft directive on takeover bids failed in July was harrowing. The text had been prepared, revised, negotiated and renegotiated during twelve years, and on the very last day it was rejected by the European Parliament by equal votes (273 for and 273 against), as, when votes in favour do not outnumber the votes against, the result is a "no". Mr Bolkestein"'s first reaction (endorsed by the Commission as it had taken the form of an official communique from the spokesman's office) was politically unacceptable. The Commissioner affirmed, among other things, that "it is tragic to see that the general interest of Europe can be sacrificed to individual interests". He accused the Parliament for having, in practice, defended "individual interests". Announcing his new initiative, Mr Bolkestein said he found the parliamentary vote that took place on 4 July "very disappointing". He went on to add that the high level experts - who are to hold their first meeting on Tuesday - will take the positions expressed by the EP (and logically also by the Council) into account during the last stages of negotiation on the former proposal.
It is important for the EU's institutional balance that this aspect should be clarified. All the European Commissioners must consider the Parliament not only as a discussion partner but also as a co-legislator at the same level as the Council, which assesses projects according to its political criteria. Its deliberations must not be considered an obstacle to be overcome in the decision-making process, but represent its full participation in the formation of Community law. The consequences should be drawn, and one must seek to understand why the Parliament voted in one way rather than the other and to take this into account. This in fact is what Mr Bolkestein did by announcing that he is proposing to present his new project as soon as possible in 2002 "taking account of the broadest range of views".
MEPs on the alert. The essential has still to be done, that is, define a Community system that is positive for the economy, that does not hamper restructuring, that takes the interests of workers into consideration and protects minority shareholders. It is not an easy thing, as what happened between April and July this year highlighted the fact that the takeover bid system has a vast impact on a series of political, economic and social areas ranging from regional policy to the location of companies to the highly fashionable subject of globalisation. MEPs are on the alert concerning the significance and the scope of this issue, as proved by the motivation and the explanations given by those who voted against the project, on 3 July in Strasbourg.
The Germans, firmly together in their negative vote, made clear their intention to prevent large groups from buying up companies essential for the economic and social fabric of a country too easily. A group of left-wing MEPs (Harlem Désir, Anne Ferreira, etc.) believe the vote was a victory for those who would like to see European regulation "take industrial and social dimensions into account and not just financial interests". It places greater importance on workers' right to information. François Bayrou also felt that the project rejected was founded on "purely financial reasoning". The Italian MEPs who voted against planned to oppose the takeover of Italian electricity producers by EDF (Electricité de France) in the absence of possible reciprocity. Jean-Louis Bourlanges endorsed this interpretation by saying that, with its raid on Italy, the "EDF was the exterminating angel of the directive". As one can see, the "no" was brought about through considerations that go far beyond the technical content of the directive and its direct aims.
For its part, half of the Parliament that voted in favour of the project shared Commissioner Bolkestein's opinion, who considers the regulation on takeover is urgent to facilitate and encourage restructuring and respect the timetable for complete integration of the European capital market (by 2005), considering that the improvements made to the initial text guaranteed the protection of minority shareholders, complete and rapid information of personnel and the possibility for the management of the enterprise "under attack" to make its point of view on the offer known to shareholders.
The (late) awakening of governments. Regarding the governments, the "politico-economic" opposition to the project was only to be seen in the final phase of negotiations, from 27 April this year, when Germany reversed its position on the essential aspect relating to possible "defence measures" against a hostile takeover bid. Earlier, negotiations had turned around questions no doubt of importance but essentially concerning the stock exchange technique. Everything took place as if the broader implications of takeover bids had not been discovered until the last minute. The stance taken by the European trade unions (ETUC) limited its criticism to the procedures for consultation of the personnel (considered insufficient), without anything being said of defensive measures. The stock exchange and financial circles were clearly in favour of the project. At the last minute, after the turnaround on the German side, the governments of Rome and Madrid - alerted by several resounding and true cases which made them understand the true importance of the legislation in discussion - gave the impression that they shared the thesis put forward by Berlin, too late to amend their position formally within the Council -but in good time for several Italian and Spanish MEPs to vote against it in the plenary session. After burying the European project, Germany availed itself of a national regulation comprising the provision that Mr Bolkestein had rejected, that is, the possibility for the management of a company to obtain advance authorisation to take defence measures in the case of a hostile bid, without having to go through the Shareholders Assembly once more. Personally, I had tried to draw attention to the implications of the takeover project, under this heading, on 15 May ("divergence over takeover bids hints at different conceptions of major aspects of the European economic and social policy"), on 30 May (to show that the quarrel over the takeover bid represents an aspect of the debate on the European model of society) and 6 July to comment on the parliamentary vote. I can only refer to these texts for what I believe to be the real things at stake.
Clarified stakes, solutions to be defined. At the present time, the substantive problems have been partially clarified but not resolved. The point of departure remains the fear that, through a hostile bid, a large group may take over control of an enterprise that is "essential for the economic and social fabric of a country or region", without the management or the personnel of this company being able to defend itself properly. The buying group could then decide, in its global strategy, to put an end to part of production or relocate certain installations, by putting an end to activities that not only have an economic bearing but which are also sometimes of a traditional if not cultural value, on the basis of global strategies decided in a distant country (on the other side of the Atlantic, for example), without any link to the zone in question - this is the aspect linked to the globalisation of the world economy.
The three answers to such concerns are well known: a) companies belong to shareholders, which, alone, are authorised to take defence measures. The management may make its position known but not take decisions; b) it is not in the interests of a buying group to devalue its acquisition, and takeover bids generally respond to the aim of relaunching and restructuring; c) the management in place may be ineffective or dormant and its replacement would bring dynamism to everyone's advantage, to the advantage of shareholders as well as the personnel. The adversaries of this project, while considering it positive in most of its provisions, insist on the inequality of the national situations. In particular the possibility for attacking differs from one Member State to the next (the two examples cited by the EP rapporteur, Mr Lehne from Germany, are famous: Alcatel may buy out Siemens but Siemens cannot buy Alcatel; the London Stock Exchange may take control of the stock exchanges of other countries but cannot come under attack). The European Commission acknowledges the fact that inequalities do exist in several sectors where the degree of market liberalisation is not uniform, mainly electricity and natural gas. It observes that the solution is simple: accept the accelerated timetable for total liberalisation proposed by the Commission. At the Stockholm Summit, France was opposed to this, with Germany's support … but the problem is not exclusively European, as in the financial area globalisation is a must. French Foreign Minister Hubert Védrine observed that it would be easier to come to an agreement if, among the buyers of European firms, there were not too many American pensioners - an allusion made to the financial power of the United States pension funds, which have enormous liquid assets to invest according to exclusively financial criteria without a concern for the industrial, regional or social aspects, let alone cultural considerations.
To this backdrop there are the related problems, namely the "golden share" (recently complicated by the conclusions of the Advocate General of the Court of Justice, Dàmaso Ruiz-Jarabo) and privatisation. I shall try to take stock of the situation tomorrow.
(F.R.)