The European Commission intends to refer Italy to the European Court of Justice to force the country to give up veto powers over takeovers of certain companies deemed strategic. The move also affects Telecom Italia.
The EC said it would give Italy one…
The European Commission intends to refer Italy to the European Court of Justice to force the country to give up veto powers over takeovers of certain companies deemed strategic. The move also affects Telecom Italia.
The EC said it would give Italy one month to address the issue, otherwise a court filing will be made.
Under Italian law the state may exercise special powers to safeguard its vital interests in companies such as Telecom Italia, which effectively means that the government can block takeovers or mergers of those companies deemed strategic.
The EC takes the view that such special powers are a violation of EU rules on the free movement of capital.
In a statement, the Brussels based agency said: “The Commission considers that such powers make direct and portfolio investment less attractive and may discourage potential investors in other [European Union] Member States from buying shares in the companies concerned.”
The EC also noted that it has received indications from new Italian prime minister Mario Monti’s government that compliance with EU law was possible within a short period. “Therefore, the European Commission has decided to postpone by one month the execution of this referral,” the regulator concluded.
The European Commission has in the past successfully sued EU member states over similar violations of EU regulations. In July 2011 Portugal finally gave up its golden shares in incumbent Portugal Telecom, following a 2010 ruling by the European Court declaring such golden shares illegal.
