Week 4 Flashcards
Harmonization Process:
Homogeneous and Harmonious achievement of the freedoms recognized by the European Union Treaty require a «level legal playing field», which is instrumental to:
fullness and effectiveness of the freedom of (primary and/or secondary) establishment of businesses
easiness in mutual recognition and reliability for entrepreneurships belongings to different (and domestic) jurisdictions
certainty in trans-national operations and more integration on European market
Pervasive:
Since 1968, the EC has adopted more than 38 directives and 10 regulations in the area of corporate law
Articulated
pursued and implemented by means of different (Directives, Regulations, Recommendations, ECJ Decisions)
Unfinished and imperfect
achieved through general principles and for segments of discipline
neither completed on the European community level
Top-down process
Harmonization by means of EU legal instruments (Directives and Regulations)
in decentralization
in centralization
Decentralization
(id est “positive harmonization”)
The main instrument utilized: Directives
Indeed, at a first sight, the number and the heterogeneity of Directives are impressive (as stated before)
The process has proceeded in a patchy way and not uniformly; moreover, the process has failed significantly on the field of the company law and company CGRs
Regulations
general compass of enforcement
mandatory enforcement
direct appliance
Critical elements:
loss of sovereignty on State members
operates by segments
pseudo-harmonization
three main structural characteristics
most part of the European Law is ruled by and embodied in Directives
the European Company Law still remains an “erratic law”
the enforcement of national rules biases the interpretation and application of European law
standardization and efficiency of the Capital Markets
Efficiency requires transparency (“the disclosure of accurate, comprehensive and timely information about security issuers builds sustained investor confidence and allows an informed assessment of their business performance and assets”): transparency must thus seen as the central element of capital market regulation
Harmonization/standardization also has serious disadvantages:
A central legislator is likely to be less informed about the practical needs and the adequacy of the rules developed than local legislators
Centralized legislation at the EU level solidifies the solutions in so far as harmonized rules are mandatory, and excludes competition for better regulation among member states
Regulation is confined on public limited companies (“minimum harmonization”)
On the contrary not always harmonization/standardization is an optimal (and efficient) goal:
variety is an element of richness
variety means better adaptability
variety is a key factor for competitiveness
