EU Warns Germany Over "VW Law"

The European Commission issued a final warning to the German government on Tuesday to repeal the so-called "VW law," which protects the German car manufacturer Volkswagen from foreign acquisition. The law, which was implemented 40 years ago when the company was privatized, gives the state government of Lower Saxony, where the company is headquartered, a veto right to fend of foreign buyers. The commission says the law violates the principle of the free movement of capital by giving a "special blocking minority right" to the state government. Germany has been given two months to act on the warning or face a battle in the European Court of Justice. However, the final decision to proceed with the suit will not be taken until November, after European elections may create a commission more sympathetic to the counter arguments offered by the German government.