Company Law and Economic Protectionism: New Challenges to European Integration

389 Pages·2011·3.264 MB·English

by  Ulf Bernitz, Wolf-Georg Ringe

COMPANY LAW AND ECONOMIC PROTECTIONISM
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Company Law and
Economic Protectionism
New Challenges to European Integration
Edited by
ULF BERNITZ
and
WOLF-GEORG RINGE
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Preface
Th is book off ers a perspective on the interaction of company law and states’ pro-
tectionist attitudes, two areas which at fi rst sight do not seem to be very strongly
connected. We hope to show, however, that—beyond the obvious area of trade
policy—economic protectionism plays a role in the design of company laws:
takeovers, restructurings, golden shares, and Sovereign Wealth Funds are just a
few examples of the rich arsenal potentially at hand for regulators wishing to pro-
tect national markets.
Th e topic has become even more relevant since the global fi nancial crisis of
2007/08. In their reaction to that crisis, European leaders have been making a
virtue of big government and state intervention. Bail outs were among the fi rst
responses to the economic contraction and Sovereign Wealth Funds have gained
unprecedented infl uence. Th e crisis has truly awoken the old steering tool of pro-
tectionism, which the European Union was supposed to overcome.
Th e contributions in this volume represent the fruit of an academic conference
held at Christ Church, Oxford, on 1 October 2009, which brought together a
group of leading experts in European company law to discuss these recent devel-
opments and possible regulatory or policy responses. Amongst others, the contri-
butions particularly focused on takeovers and restructurings, free movement of
capital, Sovereign Wealth Funds, and the internal market.
Th e conference was held under the auspices of the Institute of European and
Comparative Law and was generously funded by the Wallenberg Foundation
Oxford/Stockholm Association in European Law.
Special thanks are due to Jenny Dix for her great support in organizing the
conference and to James Morrison for excellent editing assistance.
Ulf Bernitz
Wolf-Georg Ringe
Oxford, May 2010
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Detailed Contents
Preface v
Contributors xvii
Table of Cases xxiii
Table of Legislation xxvii
1. Introduction 1
Wolf-Georg Ringe and Ulf Bernitz
I. EU LAW AND ECONOMIC PROTECTIONISM
2. E uropean Company and Financial Law: Observations on European
Politics, Protectionism, and the Financial Crisis 13
Klaus J Hopt
I. Th e right balance between negative and positive harmonization
in the European Union 15
1. Positive and negative harmonization 15
2. Pros and cons of harmonization by the Court of Justice 16
3. Pros and cons of harmonization by the European Commission 18
II. Diff erent patterns of harmonization of company and
fi nancial law: Evolution and European politics 20
1. State egoism, lobby interests, and compromise solutions:
Th e examples of the Takeover Directive and the new
European fi nancial architecture 20
2. Diff erent patterns of harmonization in company and fi nancial law 22
3. Interaction of European company and fi nancial law harmonization 24
III. US and European company and fi nancial law: Convergence,
transplants, and path dependencies 25
1. Company law 25
2. Financial law 27
3. Towards a better and more permanent transatlantic dialogue 28
IV. Conclusion: Impacts of the fi nancial crisis and the dangers of
protectionism and under- and overregulation 29
3. Is ‘Protectionism’ a Useful Concept for Company Law and
Foreign Investment Policy? An EU Perspective 32
Crispin Waymouth
I. Introduction: ‘Protectionism’ is the new black 32
II. What is ‘protectionism’ and is it a useful concept for
company law? 35
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x Detailed Contents
1. ‘What is protectionism’? 35
2. Can it be applied meaningfully to company law? 36
3. How should we look at company law and regulation instead? 39
III. How do the EU and its Member States measure up? 44
1. Do policies on investment meet the above criteria? 44
2. Do policies on company law meet the criteria? 48
3. How do we need to go forward? 51
IV. Conclusion 52
4. Protectionism, Capital Freedom, and the Internal Market 54
Jonathan Rickford
I. Protectionism defi ned and located 55
1. ‘Economic protectionism’ 55
2. Location 56
II. Golden shares and Article 63 TFEU 57
1. Th e scope of capital 57
2. Th e prohibition 58
III. First group of cases—powers reserved to the state
under public law 59
IV. Second group of cases—powers under private law 60
1. BAA case 61
2. Th e KPN case—state measure, disproportionality, and risk 63
V. Recent jurisprudence—Volkswagen 67
1. Impact 72
2. Justifying state intervention 74
3. Horizontal eff ect 76
VI. State powers of corporate control—making sense of the
golden shares cases 79
VII. A coda—back to the drawing board? Th e capital/establishment
boundary 81
1. Baars 82
2. Skatteverket v A and B 87
3. Commission v Italy (2009) 88
VIII. Exclusive application of Article 49—extended Member State
immunity in third-country cases. 90
IX. Conclusion and proposal 91
1. Conclusion 91
2. Proposal 93
5. When the State is the Owner—Some Further Comments on
the Court of Justice ‘Golden Shares’ Strategy 95
Andrea Biondi
I. Introduction 95
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Detailed Contents xi
II. Th e golden shares acquis and the internal market 96
III. Th e state as market participant—some lessons from state aid law 99
II. TAKEOVERS AND MERGERS
6. Th e Takeover Directive as a Protectionist Tool? 105
Paul Davies, Edmund-Philipp Schuster, and
Emilie van de Walle de Ghelcke
I. Introduction 105
II. Th e function of the Board Neutrality Rule 107
1. Th e redundancy argument 108
2. Th e shareholder structure argument 117
3. Evasion through pre-bid defences 124
III. Th e choices created by the Directive 125
1. Introduction 125
2. Member State choices 125
3. Company level choices 131
IV. Th e choices made—Member States 135
1. Transposition choices 135
2. Comparison of pre- and post-transposition position 138
V. Th e choices made—companies 145
1. Opting into the BNR 145
2. Taking up the reciprocity exception to the mandatory BNR 147
VI. Conclusion 152
7. Varieties of Corporate Governance and Refl exive
Takeover Regulation 161
Andrew Johnston
I. Introduction 161
II. Th e problem of harmonizing takeover regulation 162
III. Th e move to refl exive legislation 165
IV. Th e danger of protectionsim 170
V. Does European law favour CMEs over LMEs? 172
8. Cross-Border Restructuring—Company Law between
Treaty Freedom and State Protectionism 176
Jesper Lau Hansen
I. Scope of chapter and observations on protectionism 176
II. Protectionism in company law 178
III. Where to expect protectionism 181
IV. Where not to expect protectionism 186
V. Conclusion 189
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