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GOLDEN SHARES IN THE CJEU CASE-LAW. THE CONTRIBUTION OF VOLKSWAGEN I DECISION

Gina ORGA-DUMITRIU

Abstract

Closely linked to the economic developments that followed after the Second World War, the emergence of golden shares was conceived as a way of preserving in favor of the public power the control over the companies initially owned by the state and subsequently privatized. They are shares that grant the state, as a shareholder, special prerogatives in companies that operate in strategic economic sectors (public security, defense, energy, telecommunications). Recognizing the state (minority in capital!) privileged faculties of a nature to ensure its control of the decision-making process, golden shares have been qualified by the Court of Justice of the European Union as barriers to the free movement of capital as they discourage acquisitions of participations and, implicitly, foreign investments. Traditionally, the Court in Luxembourg has shown very strict control over golden shares and very rarely has received the imperative reasons of general interest often invoked by states to justify them. A landmark judgment for the golden shares case law is the one pronounced in the case Commission v. Germany by which the Court, sitting as the Grand Chamber, admitted the action for failure to fulfill obligations introduced by the European Commission following the regime established by the provisions of the Volkswagen Law, more precisely the specific powers recognized to the Federal State and the Land of Lower Saxony in Volkswagen company. The Court not only had the opportunity to contribute to strengthening the free movement of capital but also to provide a model of analysis of the restrictions that stem from what we call golden shares. The study aims not only a detailed description of the case-law but also elements of novelty of the judgment that widens the debate on justifying restrictions from the perspective of specific reasons such as protecting the interests of employees and minority shareholders.

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