European Union governments have agreed a common set of rules to make it easier for businesses in one country to buy or merge with rivals in another. The terms of final compromise were bitterly opposed by officials from the European Commission, which wanted to see fewer restrictions on European cross border takeovers. This report from Mark Gregory:
Earlier this week EU governments voted to bend the rules of the stability pact so that France and Germany wouldn't be penalised for breaking the rules on budget deficits. Now they've defied the wishes of the European Commission on another key aspect of economic policy.
After years of wrangling, EU industry ministers have approved a compromise framework for cross border mergers and takeovers that leaves many of the defences businesses use to avoid being bought out by rivals still in place.
It's a personal defeat for the EU's internal market commissioner Fritz Bolkestein who'd wanted a much tougher framework to promote economic efficiency through promoting cross border corporate deals. At an earlier stage Mr Bolkestein described the terms of final compromise as not worth the paper they were written on. Opposition to his plans was strong in Germany, where the prospect of national corporate icons like Volkswagen being gobbled up by foreign rivals caused consternation.
The watered down compromise that has been agreed leaves corporate defences such as multiple voting rights for some shares and limits on the rights of other shares in place. It could escalate trade tensions with the United States which sees barriers to the ability of American firms to buy out the competition as a form of unfair protectionism.