(Page 4 of 44) - EU Mediation of Global Capital Flows vs National Corporate-Labor Coalitions: The Great Battle over the EU Takeover Bill, 1990-2001 authored by Tiberghien, Yves.

Fortunately, such a case is available for a controlled experiment on the EU’s role

as a mediator of financial globalization: the battle over the EU takeover directive from
1989 to 2003. For years, the Commission tried to introduce a directive that would unify
takeover rules across the EU’s internal market and thus facilitate the creation of cross-
border restructuring, and, ultimately the creation of a single capital market. For years, key
states blocked the Commission’s efforts. In particularly, the UK felt that EU regulations
would unnecessarily complicate the remarkably efficient voluntary code of the London
City. As for Germany, it opposed the introduction of a culture of hostile takeovers into
consensual German capitalism. The initial logjam was broken in 1999, when Germany
became an active supporter of the Takeover Directive, partly as a way to mitigate and
codify the unavoidable clash of capitalisms. The Directive entered the post-Amsterdam
co-decision procedure.

Between 1999 and 2003, the Takeover Directive went through one of the most

amazing institutional roller-coasters ever experienced in the European Union’s history.
The Directive remained blocked for an entire year in the EU Council as a result of the
battle between Spain and the UK over Gibraltar. Once the Lisbon action plan of March
2000 -- aiming to make the EU the most competitive zone in the world by 2010)
reenergized the Takeover Directive, it was bizarrely approved by the EU’s Agricultural
council in June 2000. In the next peculiar move, the conservative German Members of
Parliament (CDU) managed to lead a rebellion within the European Parliament (EP) in
alliance with key labor leaders. The EP passed significant amendments that effectively
watered down the Directive and Chancellor Schroeder’s Third Way offensive found itself
sandwiched between CDU opponents on the right and labor leaders on the left. During
the conciliation process between the Council and the EP, a compromise was reached but
Germany broke ranks under pressure and became the key opponent of the Directive. At
this point, the UK and Germany had literally exchanged positions from the initial
situation in 1999. Likewise, Sweden moved from being an opponent to a supporter during
Sweden’s presidency of the EU (first semester of 2001) to again an opponent in 2002-
2003.

The next step was the most dramatic. On July 4, 2001, the EP took its final vote

on the Joint Text (JT) approved by the conciliation committee. This vote became one of
the most peculiar votes in the EP’s history. All EP party groups (except the ELDR
Liberal Democrats and the Non-attached group) broke down within their middle. On the
Yes side, the coalition included Benelux liberal democrats, conservatives from the UK,
France, Spain, and Italy; “modern” socialists from France, Italy, and the UK;
sovereignists, and even one Italian communist MEP. On the No side, all German MEPs
(except one CDU member) were joined by most Austrian delegates, as well as key groups
of Spanish socialists and Italian, Greek, and Dutch Christian Democrats. The most pro-
EU French party (the UDF) ended up voting with its pro-EU German friends against the
Directive, while anti-EU sovereignists like Charles Pasqua joined socialist EU-
proponents like Michel Rocard. Adding to the drama of the moment, the final vote was
unprecedented tie (273-273) and the EP President (who did not vote) declared that the
Directive had passed, only to discover an EP rule according to which a tie meant a failure
to pass. The result hung further in the balance as one voting MEP could not be identified.
In the end, the Directive failed on that Fourth of July.