The death of the golden share

‘A triumph for the European Commission’ (as USA Today chose to describe it) is not something usually to be celebrated here. But yesterday’s finding by the European Court of Justice against Germany’s ‘VW law’ – protecting Volkswagen against takeover via a blocking minority vote held by the state – really does look like a blow for greater dynamism, industrial synergy, and efficient use of capital throughout Europe.

In Britain, the golden share was used to allow the government a continuing hand in the destiny of privatized businesses  – but this ruling seems to mean that the device has finally had its day. Similar mechanisms protecting German and Portuguese energy companies, Telecom Italia and a variety of businesses in Hungary and Poland are now in competition commissioner Charlie McCreevy’s sights. Rulings have already been made against the Dutch government blocking powers in relation to postal and telecoms services. The French will now have to watch their step with EADS, the aerospace group, and Thales in the defence sector.