Brussels, 20/02/2009 (Agence Europe) - On Thursday 19 February 2009, the European Commission decided to move up a gear in a series of EU law infringement proceedings on the free movement of capital, the freedom of establishment, public tender and company law.
Free circulation of capital. The Commission has decided to take Portugal to the European Court of Justice because it believes the special rights of the state in the running of GALP infringe EU treaty rules by putting off investors from other Member States. The rules governing the privatisation of GALP Energia and the company's statutes give the state special rights like the right to veto any decision to authorise the company to sign deals on parity or subordination, and any deal likely in any way to hinder the supply of oil, gas, electricity or derived products to Portugal; and the right to appoint the head of the company's board. The Commission argues that these special powers are unjustified restrictions on the free circulation of capital and the freedom of establishment, violating EU treaty rules because they hinder both direct and portfolio investment. Portugal believes the special rights are justified on two grounds: because the services provided by GALP are of general economic interest (as defined in Article 86 of the EU treaty) and for security of energy supply reasons. The Commission, however, believes that the Portugal's motives do not meet the necessity, suitability or proportionality requirements to justify restrictions on the free circulation of capital. The Commission argues that the special rights held by the Portuguese state in GALP go beyond what is required to meet the objectives in question.
Freedom of establishment. The Commission has decided to send Portugal a Reasoned Opinion because it only allows Portuguese nationals to work as notaries. Portugal repealed the nationality rule in its legislation in 1997 but it has emerged recently that only Portuguese nationals are being allowed to become notaries and this restriction is being justified in line with one interpretation of the Portuguese constitution. The Commission has sent Bulgaria a written warning over is legislation governing the legal profession, believing that some measures in Bulgaria's law on barristers could hinder the freedom of establishment in the country for lawyers (thereby infringing Article 43 of the EU treaty). Moreover, several measures seem to infringe EU Directive 98/5/EC on working permanently as a lawyer in a different Member State from the one where the lawyer in question qualified.
Public tender. The Commission requires Italy to immediately comply with two rulings of the European Court of Justice. The first is on the renewal of several licenses to organise betting on horse races. In 2007, the Court of Justice ruled in Case C-260/04 that by renewing 329 licences without a call for public tender, Italy had not met its obligations under Articles 43 and 49 of the EU treaty and had violated the general principle of transparency and the duty to provide suitable publicity. Meanwhile, the Italian government has introduced a new law laying down that the illegally renewed licences will be re-allocated through a competitive tender and the old licences will cease to be legally valid by 31 January 2009 at the latest. The Commission believed these measures would enable Italy to comply with the Court of Justice ruling, but the new licences have still not been allocated and the above-mentioned law has been amended to extend the deadline to 31 March 2009, hence the Commission's moves on Thursday. The second case is over the award of public contracts to process urban waste in Sicily without any prior call for tender. The Court of Justice ruled on the said case in July 2007, finding Italy guilty of infringing EU rules. If the Italian government fails to respond to the reasoned opinions sent on Thursday and fails to comply with the rulings within the next two months, the Commission can take the two cases to the European Court of Justice and ask the court to levy a fine on Italy.
Company law and corporate governance. The European Commission has decided to take four countries to the European Court of Justice for failure to transpose into domestic law EU internal market directives on company law and corporate governance. The Commission will take Luxembourg to court for failing to apply the directive on cross-border mergers and the directive on company capital requirements. Spain and Portugal are also being taken to court over the company capital requirements directive. The Commission is taking the Czech Republic to court over a directive on the transparency requirements for quoted companies. (O.L. trans fl)