Direct Investment, National Champions and EU Treaty Freedoms
Within the EU, the legal dimension of trade in goods - and more recently, of trade in services - has gained clear contours. This is less true for cross-border direct investments. Within the system of the fundamental freedoms, cross-border direct investments may fall within the scope of the freedom of establishment (Art.49 TFEU, 43EC), the free movement of capital (Art.63 TFEU, 56EC), and sometimes the freedom to provide services (Art.56 TFEU, 49EC). The free movement of capital has been the last fundamental freedom to be endowed with direct effect. The investment potential of Sovereign Wealth Funds makes this a very topical subject. Only recently has the European Court of Justice started to develop the full potential of the free movement of capital and the freedom of establishment. This has raised a number of important new questions, including how broadly free movement of capital and freedom of establishment should be construed, how the two freedoms relate to each other, and how to balance the individuals' rights to market access with the Member States' competence to regulate in the public interest. In particular, the use of State measures to protect strategic or alleged public interests selectively, or to foster national champions, will be considered. Under settled case law, it suffices that a measure renders the exercise of the freedom "less attractive" to find an infringement of the free movement rules. Potentially, this opens the door for a broad review of the appropriateness of all non-harmonized mandatory rules contained in general national laws, including company laws. There is also a general question of when free movement of capital and freedom of establishment may have a horizontal effect, a matter which was raised by the Viking case. Horizontal application of the fundamental freedoms could lead to the exercise of control over private arrangements in many areas, including company law, if they have a tendency to impede, or dissuade, market access by investors from other Member States. The particular situation of third country investors also has to be considered, insofar as they may benefit from the free movement of capital but not from the establishment and services freedoms. Recent developments in EU company law are discussed in this book, notably those concerning simple cross-border relocation of businesses, as well as those regulating take-over and mergers. Overall, the book analyzes the role of the market and the role of the State with regard to direct investment, delineates the competences of the EU and the Member States in this field, and places the debate in the larger context of international direct investment. Focusing on recent developments, cases, and debates, the book also looks at the changes made to the applicable rules by the Treaty of Lisbon, including the inclusion of foreign direct investment into the Community's common commercial policy, thus providing an overview of this cutting-edge issue and a reflection on the rationales that should guide the evolution of this field of law.
Publication Date: 8/20/2010
Temporarily out of stock