EU Commission takes Germany to court again over "VW law"


BRUSSELS, Nov 24 (Reuters) - The European Commission said on Thursday it was taking Germany to the EU's highest court for a second time to force the repeal of the Volkswagen Law -- effective veto rights the state of Lower Saxony has over the carmaker.

The EU Commission said it was going back to the European Court of Justice in Luxembourg to challenge the German law.

"The European Commission has decided to refer Germany back to the Court of Justice of the EU for failing to fully comply with the court's previous ruling on the Volkswagen Law," the Commission said in a statement.

"Since Germany has failed to take all the necessary measures to fully comply with the court's judgment, the Commission has now decided to bring the case before the court again," it said.

It would ask the court to impose financial penalties of 31,114.72 euros per day from the date of the initial court ruling until Germany complies with the 2007 judgment or until the court made a second ruling. It would additionally ask for Germany to be penalised to the tune of 282,725.10 euros per day from the date of the second court ruling until Germany ensures its law complies with EU rules.

Lower Saxony, the second largest shareholder in Volkswagen , has resisted the European Commission's efforts to end its special status.

The European Court of Justice found in 2007 that the law, which effectively gave Lower Saxony veto rights beyond its 20 percent voting stake in VW, was in breach of the EU's principle of free movement of capital.

Germany reworked the law in 2008, but preserved a clause that implicitly allows Lower Saxony to have blocking minority status, which is normally reserved for shareholders with voting rights of at least 25 percent.

The European Commission and Germany have remained at loggerheads over whether those changes sufficiently addressed the court's concerns. (Reporting by Charlie Dunmore; writing by Rex Merrifield; additional reporting by Christiaan Hetzner)



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