| Author (Person) | Atkins, Ralph, Buck, Tobias |
|---|---|
| Series Title | Financial Times |
| Series Details | 28.6.06 |
| Publication Date | 28/06/2006 |
| Content Type | News |
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The European Commission has decided to ask Germany formally to modify its legislation (Article 40 of the "Kreditwesengesetz") which provides that the name "Sparkasse" (savings bank) may be used only by publicly-owned banks. The effect of this law is that a savings bank automatically loses the right to use the name "Sparkasse" after privatisation. The Commission considers that this is in violation of EC Treaty rules on the freedom of establishment (Article 43) and free movement of capital (Article 56), because it prevents private investors from benefiting from the goodwill value of the name. In this case the goodwill value corresponds to, amongst other things, the extent to which the name is considered favourably by the general public. The Commission's request applies only to this aspect of the privatisation, which in the Commission's view should be in accordance with EC Treaty freedoms, and in no way attempts to prescribe whether or not existing savings banks should in fact be privatised. The Commission’s request is in the form of a reasoned opinion, the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. Discussions between the German authorities and the Commission will continue in order to see if a solution compatible with Community law can be found. In the absence of a satisfactory reply from Germany within two months of receiving the reasoned opinion, the Commission may decide to refer the matter to the European Court of Justice. |
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| Countries / Regions | Germany |
