GERMANY: Government sees no Volkswagen Law action
The German government has said it sees no need to take any further action at the moment with regards to the dispute with the European Commission over the new Volkswagen Law.
A spokesman told German press agency dpa that the European Court of Justice ruling on the original Volkswagen Law had been fully complied with in the drafting of the new law.
The European Commission had issued a formal warning that it would initiate legal proceedings against Germany for failing to comply with a European Court of Justice ruling on the law. Germany has eight weeks to revise the law or the commission may try to fine the nation.
The German cabinet approved the new law at the end of May. It was redrafted after the ECJ ruled that the existing law, which dated back to the privatisation of Volkswagen, breached European laws on the free movement of capital. The new law retains a power of veto for the state of Lower Saxony on all major decisions.
The president of Lower Saxony, Christian Wulff, believes that the government may be obliged to buy up shares in VW if the Volkswagen Law is overturned. When VW was privatised in 1959, the state guaranteed to maintain a state minority interest. Otherwise the national government would be obliged to buy up shares and increase the state shareholding to above the 25% threshold that is normal for a shareholder's right of veto, reported dpa. The state of Lower Saxony currently has a 20.3% shareholding.
Porsche currently has a 31% shareholding in Volkswagen but plans to raise this to 50% before the end of this year.