VW-law: Bolkestein wins Commission backing for legal steps 

EU Internal Market Commissioner Frits Bolkestein won the necessary consensus among his colleagues to take first steps against Germany over the disputed, 40-year "Volkswagen-law" on 19 March. The Commission suspects that the shares the State of Lower Saxony - in which Volkswagen is based - holds in the company, discourages investors and obscures the level-playing field for take-overs in the EU.

An earlier attempt to launch formal legal action on the issue was delayed because of dissensions in the Commission, voiced especially by Commission President Romano Prodi (see

EurActiv, 6 March 2003). After talks between Prodi and Lower Saxony's newly elected premier, Christian Wulff, resulted in no major breakthrough, consensus in the Commission was to go ahead with the inquiry.

The German government reacted vehemently against the letter of formal notice, saying it found the motion "incomprehensible." Chancellor Gerhard Schröder's spokesman said there was no doubt about the compatibility of the VW law with European law." Having recieved a first warning, Germany now has two months to provide the Commission with sufficient arguments in defense of the law. If these are deemed unsatisfactory, the Commission will consider formal legal action at the European Court of Justice (ECJ).