Brussels, 01/12/2008 (Agence Europe) - On Thursday 27 November, the European Commission sent a formal request to Greece calling on it to eliminate the restrictions on investment in strategic companies introduced by Law 3631/2008. The Commission considers such restrictions represent unjustified obstacles to EC Treaty rules on free movement of capital and freedom of establishment.
The law in question establishes: (i) an ex-ante authorisation system, whereby the acquisition of voting rights by shareholders other than the State is limited to 20%, unless prior approval has been granted by the inter-ministerial privatisation committee, and (ii) an ex-post approval system, according to which certain important corporate decisions as well as certain decisions concerning specific management matters need, for their validity, the approval of the minister of economy and finance.
The Commission considers neither of the two authorisation systems is suitable or proportionate. “The criteria for granting the authorities' prior approval are imprecise, and no criteria exist for the ex-post approval by the minister of economy and finance”, it states, noting that this situation gives the administrative authorities a wide margin of discretion, which in the Commission's view restricts the rights of potential investors deriving from Article 56 of the EC Treaty on the free movement of capital.
In addition, the Commission considers that the law does not provide a clear definition of the scope of the measure, thus creating legal uncertainty as to which companies and sectors are currently subject to these mechanisms or might be covered by them in the future.
Consequently, it is considered that the schemes are not based on objective criteria known in advance to the undertakings concerned and subject to judicial review. Therefore, in the Commission's opinion, both the ex-ante authorisation regime and the ex-post approval system go beyond what is necessary to ensure the objective pursued by the Greek government, i.e. ensuring that there is a continuous and uninterrupted supply of services and that the networks function well. (O.L./transl.jl)