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Germany wins EU court fight over VW law

Tuesday, October 22, 2013 - 02:09

The EU's top court has ruled that Germany can retain key power of veto at carmaker Volkswagen, after it turned down the European Commission's bid to overturn the so-called Volkswagen law. The ruling means Germany avoids fines worth tens of millions of euros. Joanna Partridge reports

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Germany's won the right to keep its power of veto at carmaker Volkswagen, in a long-running battle with the European Commission. Europe's top court turned down the Commission's attempt to abolish the controversial "VW law". UPSOUND OF JUDGE The law regulates the ownership of Europe's biggest carmaker. It gives the German state of Lower Saxony a veto over major decisions at the firm, such as mergers and acquisitions. Lower Saxony is where VW's headquarters are located and is its number two shareholder - with a 20% stake. Under German financial market laws, stakeholders need at least 25% to have a blocking minority. The ruling means Germany has avoided a fine which could have been as high as 70 million euros. Stephan Weil is Lower Saxony's State Premier. SOUNDBITE: LOWER SAXONY STATE PREMIER, STEPHAN WEIL, SAYING (German): "I've never understood why the European Commission was attacking this successful company, especially at a time when large parts of the European automobile industry are in great difficulties. VW isn't in difficulty, VW isn't a problem for Europe, VW is part of the solution for Europe." The law's been in place for over 50 years and effectively protects VW from any takeovers. Lower Saxony has argued that the law doesn't give it special status, rather strengthens the firm against the exaggerated interests of certain shareholders. VW's top labour leader believes the verdict also protects workers. SOUNDBITE: V'S TOP LABOUR LEADER, BERND OSTERLOH, SAYING (German): "We're not just talking about Lower Saxony in VW's case. Of course we're talking about Germany, but also about almost 20 European countries where we now have sites. Within the European works council, there are discussions about the degree of capacity and the employment situation and which models are being built where." This verdict brings to an end years of legal dispute. The European Commission first took Germany to court over the law in 2005, saying it breached EU laws on the free movement of capital. It's the Commission's goal to roll back state influence over large companies.

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Germany wins EU court fight over VW law

Tuesday, October 22, 2013 - 02:09