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beginning to emerge. "In this respect, Germany has a long way to go," said Theodor
Baums, a member of the government commission that helped draw up the legislation.

If approved by parliament, the law would go into effect next year. But that’s not
a given, since the European Commission is still hoping to pass its directive. Because EU
law takes precedence over national law, the German bill "would have to be amended,"
said Jonathan Todd, a spokesman for the internal markets committee of the commission.
But, Mr. Todd added, Germany proved earlier this month that it wields considerable clout
in getting its way in the European Parliament.

Parliament Backs Deal on EU Takeover Directive

By Daniel Dombey in Brussels

Financial Times, December 16, 2003

The 14-year struggle over a European takeover directive ended on Tuesday when
the European parliament backed a deal previously endorsed by national governments,
but which angered the European Commission. Members of the parliament approved the
compromise by 321 votes with 219 against and nine abstentions. The proposal is now set
to become law, as has been expected since all 15 European Union member states agreed
the deal last month.

Although the goal of a takeover directive has always been to facilitate European
mergers and acquisitions as a step towards a genuine single market, the final version of
the legislation allows companies to fend off takeovers using multiple voting shares and
"poison pill defences" without shareholder approval.

Frits Bolkestein, Europe’s single market commissioner, bitterly opposed the deal,
which he feared could encourage European protectionism through enshrining such
defensive techniques as "options" for countries and governments.

US officials have also worried that provisions that allowed governments to apply
different rules for takeover bids depending on the nationality of the would-be acquirer
could give a signal that Europe "is not open for business".

But neither the parliament nor member states heeded Mr. Bolkestein’s last-
minute plea that: "I do not think we send the right message to the market by adopting
the proposal in its current form.”

Many MEPs were keen to agree a measure after an earlier tougher version of the
directive failed at the last hurdle in 2001. Member states led by Germany, which

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