Volkswagen Takeover Law Triggers EU Court Case Against Germany
The European Union is suing Germany over the so-called Volkswagen (VOW) Law that protects Europe’s largest carmaker from a takeover.
The legal action concerns non-respect by Germany of a previous European court ruling on the matter, the European Commission said in an e-mailed statement today.
“Since Germany has failed to take all the necessary measures to fully comply with the court’s judgement, the commission has now decided to bring the case before the court again,” the Brussels-based regulator said.
The European Court of Justice declared the law, which grants the German state of Lower Saxony a right to block major decisions at Volkswagen AG, illegal in 2007, saying it restricts the free flow of capital in Europe. Germany modified the law a year later without changing Lower Saxony’s blocking minority.
A renewed attempt by the European Commission to overturn the law wouldn’t be “conceivable,” David McAllister, prime minister of Lower Saxony and a member of Chancellor Angela Merkel’s Christian Democratic Union, said in a letter to the Brussels-based regulator earlier this month.
VW’s Wolfsburg headquarters are in Lower Saxony, which is the carmaker’s second biggest shareholder after Porsche SE.
“It’s not conceivable that the European Commission is using a highly debatable contract-violation procedure to weigh on a company that has become a global player as well as an exemplary company,” McAllister said in his letter dated Nov. 16.
To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
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