Brussels, 05/03/2003 (Agence Europe) - The European Commission has decided to postpone its decision on Volkswagen for two weeks in order to make an additional analysis of the complex legal issues raised by this case, Jonathan Faull, Commission Spokesperson, said on Wednesday. At a proposal by Commissioner Frits Bolkestein, the Commission was to decide to send a letter of formal notice to Germany on the subject of the law allowing the Land of Lower Saxony to hold minority shares with a right of veto in Volkswagen and to limit to 20% the number of shares that any one shareholder may hold in the share capital, in order to prevent takeover (see yesterday's EUROPE, p.15). These provisions run counter to Article 56 of the Treaty on the free movement of capital. Chancellor Gerhard Schröder and the new president of the Land of Lower Saxony, Christian Wulff, therefore stepped up pressure on the Commission in opposition of such a decision.
"The Commission considers, by consensus, that an additional analysis is required, especially in order to assess the ramifications that the question could have for the interior market", Jonathan Faull commented. A copy was therefore sent to the Commission's legal department, which has now been examining the case for nearly two years. The case is said to be "complex" as German law does not create discrimination between investors of Member States, another Community source comments.
Further to the ruling by the Court of Justice on 4 June last on "golden shares", the Commission had resumed analysis of several cases of "special powers" or specific shares ("golden shares" which allow a State to maintain control on privatised firms.
On 5 February it sent a reasoned opinion to the Netherlands concerning the special powers held by the State in the companies KPN and TPG (TNT Post Groep N.V) formed from the 1998 privatisation of the historic telecommunications and postal operator. The Dutch Finance Minister announced that the Netherlands is not willing to give up its golden shares. The Commission considered as illegal the State's law to oppose certain decisions and to nominate members of the firm's board. On this last point clarified by the Court of Justice, the cases of Volkswagen and KPN are very close, it is admitted at the Commission.
One month ago, the Commission asked Denmark for further information regarding Copenhagen Airports and also Italy with regards its privatisation law that had been condemned by the Court of Justice on 23 May 2000. Furthermore, the Commission sent a reasoned opinion to Italy and Spain in November 2002 concerning laws intended to block EDF's entry to their energy market.
It has already taken before the Court the case of special powers held by the Spanish State in the companies Repsol, Telefonica de Espana, Tabacalera and Endesa, as well as the case of special powers held by the British State in BAA, airport management company.