Germany: Shareholder Activism + VW Law

A couple of items concerning Germany:

(a) In October 2007, the European Court of Justice held - in Commission of the European Communities v Federal Republic of Germany (Case C-112/05) - that Germany had failed to fulfil its obligations under the EC Treaty by maintaining in force provisions of the so-called "VW Law" under which, inter alia, shareholder voting rights in Volkswagen were capped at 20% and the Federal State and Land of Lower Saxony each had the right to appoint two representatives to the supervisory board. Earlier this month it was reported that EU Commissioner Charlie McCreevey had written to Germany's justice minister because of his concerns over the manner in which Germany proposes to comply with the ECJ decision. McCreevey is reported to have written:

"I am informed that your services are of the view that it is sufficient to eliminate two of the special requirements of the law - mandatory [state] representation on the board and the voting cap - and not the third [the 20% blocking minority] in order to comply with the ruling of the court. ... All three provisions, including the 20% blocking minority ... need to be abolished in order to implement the ruling correctly."

(b) The March 19th issue of The Economist contains an article titled "Raising their voices", which provides an example of successful shareholder activism at TUI.

Postscript (5 June 2008): Today the European Commission began infringement proceedings against Germany for its failure to comply with the ECJ's opinion. See here for further information.