Germany Might Escape Penalties Over VW Law image

An adviser to the European Union’s top court said that Germany could escape fines as it complied with the 2007 ruling to change the VW law.

The German law changes that prevented VW from takeovers since 1960 comply with the ruling from the tribunal, according to Advocate General Nils Wahl of the EU Court of Justice. But the European Commission said that Germany’s overhaul of the Volkswagen law violates the bloc’s rules as the government veto powers at the automaker still exist.

The Commission added that the Court of Justice abolished two of the three provisions which were ruled unlawful and kept the blocking minority. If the EU court agrees with the European Commission, Germany might pay penalties of millions of euro. In October 2007 the top-court in the EU overturned the law which protected VW by capping shareholder’s voting rights at 20%, whatever the size of their holdings was. Now Germany face penalties as it failed to end Lower Saxony’s blocking minority at VW when the law was changed in 2008.

The Commission won the 2007 case and in 2012 it sued Germany again due to its “piecemeal approach” to modifying the law. It wants Germany to pay a 31,114-euro penalty a day beginning with the 2007 ruling until today’s case, plus a 282,725 euro daily fine beginning with today’s case until the VW law will comply with the EU rules.

Source: Bloomberg