EU takes France to task over takeover rules

French rules obliging foreign companies to seek permission for takeovers have been challenged by EU officials as part of a wide-ranging assessment of single market regulations.

Internal market commissioner Charlie McCreevy had warned that Paris faced censure over the proposals, rushed through the national parliament last December.

The rules oblige foreign firms wanting to take over French companies operating in the public policy, public security or national defence sectors to seek special permission.

McCreevy believes the rules break EU regulations on the freedom of establishment, since similar rules do not apply in other countries.

France – wary of accusations of protectionism – has already watered down the proposals, but rules requiring EU firms owned by third-country investors to undergo lengthy authorisation are still considered too much by McCreevy.

Paris has two months to respond or face the threat of legal action at the European court of justice.

Gambling

The action against the French takeover law is one of more than 2000 cases brought by the commission against member states on Thursday for failing to comply with EU rules.

France, along with Austria and Italy, is also in the firing line over its state-run gambling monopolies, which Brussels believes discriminate against businesses that are legally established elsewhere in the EU.

Such monopolies are allowed under EU rules when they are designed to protect consumers – in this case from addiction to gambling – by limiting public access to certain services.

But the commission is concerned that the widespread promotion of state-owned lottery and gambling services – a major source of revenues for national governments – has negated this public service.

“A member state cannot invoke the need to restrict its citizens’ access to [gambling] if at the same time it incites and encourages them to participate in betting offered by national operators,” the commission said in a statement.

Six other member states – the Netherlands, Denmark, Sweden, Finland, Germany and Hungary – already face similar investigations from the commission.

The European betting association welcomed the decision, saying it hoped the proceedings would bring an end to the “witch-hunts against private EU licensed [betting] operators”.

France recently arrested two directors of Austrian online gambling company bwin on the grounds that their website broke national gambling rules.

In a related issue, Poland has been criticised for taxing winnings from foreign lotteries at a higher rate than those for domestic winnings.

Notaries and other professions

France is also one of several countries criticised for its rules on notaries and other professions.

Some 16 member states require notaries offering legal services to be nationals of their own country, a requirement that the commission considers in breach of EU rules.

Austria, Belgium, France, Germany, Greece, Luxembourg and the Netherlands have already been warned to modify their rules, and now face the prospect of court action, while the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia must justify the requirement to the commission or face the same threat.

The countries claim that EU rules allow them to oblige people carrying out official functions to be of a specific nationality, but the commission believes that this would not apply to notaries, as they “cannot be deemed to exercise state authority”.

Spain, Italy and Portugal are the only countries to have abolished the nationality condition previously in force for notaries.

France is also criticised for failing to recognise professional qualifications earned in other member states, including those for midwives, nurses, pharmacists, insurance agents, child care assistants, riding instructors, golf instructors and firefighters.

Meanwhile, rules preventing chimney sweeps from other EU countries operating in Germany and Spanish rules on private security services have also led to legal proceedings from the commission.

Transport

A number of infringements of EU transport regulations have also elicited a tough response from Brussels.

Thirteen countries have failed to implement EU rules on safety and interoperability of rail businesses within the EU – Belgium, Germany, Estonia, Greece, Spain, France, Italy, Luxembourg, the Netherlands, Portugal, Sweden, Slovenia and Slovakia.

And the commission claims that Greece and Cyprus are the only member states to have failed to introduce digital tachographs – which register the distances travelled by heavy goods vehicles – by the deadline of May 1 2006.

Luxembourg, meanwhile, faces the prospect of legal action over its failure to respect EU legislation on aviation security.

Financial issues

Financial matters also account for a large number of breaches of EU regulations.

Italian rules on motor insurance – obliging providers to operate in every region of the country – as well as Finnish regulations on insuring imported cars have both been challenged by the commission.

And German rules on insurance policies – which fail to meet EU standards on pre-contractual information – have also been questioned.

Meanwhile, the Czech Republic, Hungary and Poland are criticised for failing to transpose rules on private pension companies, even though such companies do not exist in these countries, which only have public pension schemes.

Italy is also criticised for failing to transpose the same legislation before the September 2005 deadline.

Public procurement rules have also been breached in several member states – Belgium, Estonia, Finland, Germany, Greece, Portugal, Slovenia and Sweden have failed to adapt their national regulations to new EU standards.

And a town planning law in the Spanish city of Valencia has also been challenged for failing to meet EU public procurement regulations.

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