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Words in the News
 
Friday 28 November 2003
 
EU takeovers
 
European Commission 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:
 
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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.

MARK GREGORY, BBC
 
 
Listen Listen to the words
 
bend the rules
 
if you bend the rules you interpret them in a way that allows you to do something they really forbid
 
stability pact
 
an agreement that forbids countries which use the Euro to have large budget deficits
 
key aspect
 
a very important part of a policy - one which characterises it
 
wrangling
 
arguing about something which is difficult to settle
 
compromise framework
 
a set of rules that help you decide how to behave in a situation where parties have differtent interests. Here - with everyone getting less than they had wanted
 
cross border mergers and takeovers
 
when firms from different countries join together, or one gains control of another
 
not worth the paper they were written on
 
completely useless
 
gobbled up
 
here - quickly taken over. Literally, if someone gobbles food they eat it very quickly and greedily
 
watered down
 
made less forceful
 
escalate trade tensions
 
increase the sense of fear and nervousness about trade
 
 
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