EU Sues Germany Over VW Law

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Steven02 Steven02 on Mar 20, 2012

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

  • Sitting@home Sitting@home on Mar 20, 2012

    "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.

  • Sinistermisterman Sinistermisterman on Mar 20, 2012

    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?

    • Shipwright Shipwright on Mar 20, 2012

      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.

  • Les Les on Mar 21, 2012

    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.