ECJ told Germany has complied with 2007 ruling on VW law

Article by Anita Panait, on May 30, 2013

Germany has complied with a ruling of the European Court of Justice (ECJ) over a law that gives state of Lower Saxony veto powers over Volkswagen, Advocate General Nils Wahl said in a written opinion on the case. According to Wahl, ECJ should reject an argument of the European Commission that insists on having Germany fined for infringing European Union rules.

Wahl agreed with Germany that it had complied with the terms of the ruling passed in 2007 and had already made the required overhaul of the VW law. ECJ judges will hand down their ruling on the case in the next few months. While Wahl's opinion is not binding, ECJ judges usually follow such opinions in majority of cases.

The case revolves around the "VW Law," which was enacted in 1960 and serves as a prevention against hostile takeovers. The law protects the carmaker by limiting shareholder's voting rights at 20 percent, regardless of how much of VW they own. This matched the staked owned during the previous four decades by the state of Lower Saxony.

The EC claims that Germany's overhauled VW law still violates EU rules since it gives the government veto rights at the carmaker. Germany was supposed to write off three provisions of the VW law that were declared unlawful by the ECJ in 2007. The country, however, scrapped only two provisions and kept the one that gives the government veto powers over the company, EC argues.

EC wants Germany to pay a daily penalty of EUR31,114 ($40,000) from the 2007 decision until it complies or until the ruling in the current case.  EC also wants Germany to pay a daily fine of EUR282,725 from the ruling in the current case until the VW law is in line with EU rules. In his opinion, Wahl said that if the ECJ rules that Germany had not complied with the 2007 decision, the monetary penalty should be significantly lower than what the EC demands.

Topics: germany, vw

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