Brussels, 28/06/2006 (Agence Europe) - On 28 June the European Commission decided to ask Germany formally to modify its legislation (Article 40 of the "Kreditwesengesetz") which provides that the name "Sparkasse" (savings bank) may be used only by publicly-owned banks. The effect of this law is that a savings bank automatically loses the right to use the name "Sparkasse" after privatisation. The Commission considers that this is in violation of EC Treaty rules on the freedom of establishment (and free movement of capital.
In its reasoned opinion, the Commission stresses that, the German authorities are completely free to decide whether or not to privatise a "Sparkasse". However, once the German authorities have decided to privatise a “Sparkasse”, as the federal state of Berlin has done in relation to the "Berliner Sparkasse", the arrangements for the privatisation must comply with EU law. In the Commission's view, the fact that a private investor cannot acquire the name "Sparkasse" in the event of a privatisation is liable to hinder the freedom of establishment of companies from other Member States as well as the free movement of capital, as it prevents private investors from making use of the goodwill value of the name "Sparkasse" and therefore discourages them from acquiring this type of bank.