Direct Investment, National Champions and EU Treaty Freedoms: From Maastricht to Lisbon
Frank S. Benyon - Hart Publishing, 2010
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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.
