CJE/03/6 6 February 2003
Opinion delivered by Advocate General Ruiz-Jarabo in Cases C-463/00 and C-98/01
Commission v Spain and Commission v United Kingdom
The advocate general proposes that the Court of justice should dismiss the action against Spain in the "golden shares" cases and uphold the action against the United Kingdom
Mr Ruiz-Jarabo calls on the Court to find in favour of Member States retaining their ability to regulate systems of company ownership in so far as those systems do not discriminate against nationals of other Member States
In 2000 and 2001, the Commission brought actions against Spain and the United Kingdom for infringement of the principles of freedom of establishment and free movement of capital. Both countries have arrangements in place which make certain operations by privatised companies in strategically important parts of the economy subject to prior administrative approval. Those powers are commonly referred to as "golden shares".
The Spanish rules. Law 5/1995 on the legal arrangements for disposal of public shareholdings in certain undertakings lays down the rules for the privatisation of various public-sector undertakings. That law and its implementing Royal Decrees have imposed on undertakings like Repsol (petroleum and energy), Telefónica (telecommunications), Argentaria (banking), Tabacalera (tobacco) and Endesa (electricity) a system of prior administrative approval, which applies to major company decisions (winding-up, demerger, merger, change of company object, transfer of assets or share capital).
The United Kingdom rules. The Articles of Association of British Airports Authority plc (BAA), the privatised company which owns the United Kingdom's international airports, create a Special Share ("golden share") for the Government, whose consent is thus required for certain operations by the company (winding-up, disposal of an airport). The Articles also prevent any person from acquiring more than 15% of the voting shares in the company's capital.
On 4 June 2002, following actions against Portugal, France and Belgium, the Court of Justice delivered three judgments concerning the area known as "golden shares", in which it stated that:
Advocate General Ruiz-Jarabo is today delivering his Opinion in the Spanish and United Kingdom cases.
The Advocate General's Opinion is not binding upon the Court of Justice. His role is, to propose to the Court, acting with complete independence, a decision on the legal points in order that the cases referred to it may be resolved.
Mr Ruiz-Jarabo refers to the Treaty rule which provides that the Treaty in no way prejudices the rules in Member States governing the system of property ownership and calls on the Court to reconsider how that rule applies to schemes creating special shares for the State. In this way the public authorities can impose specific economic-policy objectives other than the pursuit of the greatest financial gain which is characteristic of private business. Therefore, a national measure concerning the public sector system for adopting decisions must be deemed compatible with the Treaty, unless it is proved that it is being used in an unjustifiably discriminatory manner.
Having made that point, the Advocate General goes on to apply the decisions of 4 June 2002 to the cases in question.
Commission v Spain. Mr Ruiz-Jarabo considers that there are many similarities between the Spanish and Belgian rules:
The differences between the two sets of rules are as follows:
The Advocate General considers that the potential restrictions on the free movement of capital provided for by the Spanish rules are justified and proportionate to the objective which they pursue. Mr Ruiz-Jarabo therefore expresses the view that the Commission's action against Spain should be dismissed.
Commission v United Kingdom. The Advocate General takes the view that none of the criteria accepted by the Court of Justice when it considered the Belgian rules is met, given that the decisions which may be taken by the public authority by virtue of the Special Share are not subject to any conditions or to review by the courts. As a consequence, in the Advocate General's opinion, the United Kingdom regime is contrary to the principle of free movement of capital.
Note : The judges of the Court of Justice now begin their deliberation in this case. The judgment will be delivered at a later date.
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- Cases C-367/98, C-483/99 and C-503/99. See press release No 49/02. All the documents are available on the Court of Justice's web-site at http://curia.europa.eu/.