European Court Scores for Competition

An item from the Guardian site reports the good news that the European Court of Justice has struck down a federal law in Germany that acted as a barrier against a takeover of Volkswagen. I applaud the court for this clearly correct decision because this impediment merely served to keep the local state's power in the firm in addition to serving as a protectionist instrument. As the court argued, this legal requirement limited the movement of capital by hindering acquisition and management control. the related argument that the instrument was necessary to protect the interest of workers and the Lower Saxony region deserved to fail for the reason that it merely gave power to politicians.

As is expected, Porsche may make a formal offer for acquisition and control of the firm but this will now be open to competition by other firms who see value in the open business environment. While I am cautious of large mergers and acquisition because of the poor record throughout the world, the court has opened up Europe to fuller competition in industry and investment and that is all for the good. More competition please!