The head of the German state which partly owns car maker Volkswagen said on Wednesday the European Commission would probably take Germany to the EU’s highest court over the so-called “VW law”, Reuters reported.
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“I fear that Internal Markets Commissioner (Frits) Bolkestein will stick to his arguments,” Lower Saxony state premier Christian Wulff told Reuters in Brussels, adding that the Commission would probably lodge a formal complaint.
A Commission complaint to the European Court of Justice would be the final step in legal moves against the “VW law”, which effectively safeguards local jobs and prevents a hostile takeover by capping shareholder voting rights at 20%, Reuters said.
The report noted that the Commission started legal action in March against the law, arguing that it was a barrier to freedom of investment and breached EU treaty rules.
Reuters said the German government and Lower Saxony, which holds just under 20% of VW’s common stock and 20% of the voting rights, argue that the law does not hinder the free movement of capital.
Although industry watchers do not expect an abolition of the law to trigger a bid for VW, with few rivals in a strong enough financial position to contemplate such a step, many say it could alter the firm’s management culture by reducing state influence, Reuters said.
