Lisbon bids to clinch company statute deal

Date: 04/05/2000

By John Shelley

TOP-LEVEL talks between the Spanish and Portuguese governments have boosted hopes of an end to the 30-year-old impasse over planned EU legislation which would allow firms to set themselves up as pan-European companies.

Lisbon has launched a concerted bid to get the company statute plan, which was originally proposed in 1970 but has been held up by decades of wrangling over the detail, over its last political hurdle before it hands over the Union presidency to France at the end of June.

In an attempt to break the deadlock, Portuguese Premier Antonio Guterres has intervened to try to persuade Madrid to drop its objections to the proposal. He argues that is no longer reasonable to hold up a plan which has been agreed in principle by all 14 other member states after years of negotiations. "It is an issue that has been on the table for so long that we are going to try to move it forward," said a presidency spokesman. However, he cautioned against over-optimism about the chances of a deal, adding: "I would not want to predict success at this stage."

The latest proposal has been blocked for more than a year by a double objection from Madrid; firstly, over the status of Gibraltar and secondly, over the rights of workers to be represented on the boards of European companies.

But the deal struck between Spain and the UK last month on Gibraltar has lifted the first obstacle and, with Premier José Maria Aznar's victory in national elections in March easing political pressure on the Spanish government, EU officials are now hopeful the time is right for a deal. "We were told that it would be politically impossible for the Spanish to make a deal before the election because of business fears they would lose their voice. Now we are hoping the situation will have changed," said one official.

The idea behind the statute plan is to allow companies which operate in more than one Union member state to save time and money by simplifying their operations, removing the need to set up a different headquarters in each country.

But since the move was first proposed, officials have wrestled with the problem of how to protect employees who are entitled to be involved in the management of their firms under national law - as is the case, for example, in Germany and the Netherlands - while avoiding imposing new obligations on employers in countries where such requirements do not exist.

The Spanish, while broadly in favour of the plan, have objected to a clause setting out the conditions under which employees of pan-European companies would be given the right to representation on the board. The argument centres on a complex formula for deciding what percentage of workers would be required to trigger this right.

EU insiders insist there is no room for further compromise as Madrid has already been offered a four-to-five year opt out from the offending clause.

Top-level talks between the Spanish and Portuguese governments have boosted hopes of an end to the 30-year-old impasse over plannned EU legislation which would allow firms to set themselves up as pan-European companies.