By on March 20, 2012

The EU Commission in Brussels made good on its threat to drag Germany in front of the European Court of Justice. According to Automobilwoche [sub], Brussels has filed suit in Luxemburg. Brussels demands that the “special treatment” for Volkswagen is to be dropped. If the suit is successful, and if Germany remains obstinate, then a penalty of at least €46.6 million ($62.2 million) is demanded. The fine would have to be paid by the German government, not by Volkswagen.

Volkswagen’s home state of Lower Saxony is holder of 20 percent of Volkswagen shares. The state has a veto right, courtesy of the VW law. That veto right protects Volkswagen from unwanted takeovers. Usually, such a veto right needs 25 percent, and Brussels insists on putting Volkswagen and Germany in compliance.


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10 Comments on “EU Sues Germany Over VW Law...”

  • avatar

    One month it’s, “Bail us out!” then next it’s, “We will sue you!”

  • avatar

    OK, you lost me there.

    • 0 avatar

      I believe what PaulVincent meant was that Germany is one of the few EU countries that has the economic health to help bail out the PIIGS countries in order to keep the EU from falling apart. Now that same EU is going to, or wants to sue Germany.

    • 0 avatar

      @tekdemon. The seat of power of the EU is located in Brussels, just as the seat of power of the US is located in Washington. The individual countries that make up the EU are similar to the individual States that make up the US. If several of the EU countries go bankrupt they could not remain in the EU as it would drag the whole union down, unless they are propped up by money from healthier member countries (see Greece). Now, in the last sentence replace the words “EU countries” with States and the word “EU” with US. Can you really imagine an organization or political entity activley giving up power? would the US allow states to secede from the the United States? So just because Brussels is located in Belgium and Belgium as a country is doing reasonably well it doesn’t mean diddly, as this is where all the EU politicians are located. This is the EU body that begged Germany (among other EU countries) to bail out Greece (and very possibly more member nations in the coming year) that now want to slap them on the wrist for looking out after their own interests (which is why they have the to cash bail out other EU members in the first place). This is similar to cutting off your nose to spite your face. NOT VERY SMART.

  • avatar

    So they can remove the law or buy more shares of VW. No reason that they shouldn’t play by the same rules.

  • avatar

    “then a penalty of at least €46.6 million ($62.2 million) is demanded”

    VW’s market cap is currently 58.7 billion Euros, so that 62.2 million fine buys 2.9 billion worth of voting rights.

  • avatar

    The EU seems to forget that the EU exists for the benefit of Germany, not the other way around. If this suit goes through the German government will just pay the fine and continue doing what they’ve always done. Protecting German industry. Whilst not necessarily within the confines of EU rules, Germany will do it anyway. Why? Well lets name a couple of European car manufacturers which were left to fend for themselves with little to no protection from their governments. Rover, Saab, anyone?

    • 0 avatar

      Unless it becomes to onerous for Germany to deal with these issues, in which case they will threaten to withdraw from the EU causing a chain reaction ending with the dissolution of the whole union.

  • avatar

    Just out of curiosity.. if Germany refuses to rescind the VW Rule, and refuses to pay fines levied upon it… what happens?

    Historically, Belgium has a poor track record when it comes to having conflicts of interest with Germany.

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