Europeanisation with Many Unknowns: National Company Law Reforms after Centros

Abstract

Negative integration through the expansive interpretation of European market freedoms is said to undermine domestic social regulation – by vertically imposing a strictly liberal interpretation of EU rules and by pushing EU member states into horizontal regulatory competition. This article analyses domestic policy responses to one particularly prominent instance of negative integration: the CJEU’s case law on the freedom of establishment since its first landmark ruling on Centros in 1999. The analysis shows that national company laws have only converged downwards in one particular subfield – minimum capital requirements – but they remain strikingly diverse across, and increasingly within, member states on most other issues, such as workers’ codetermination rights. Legal uncertainty about the Court’s case law, the mixed economic incentives it provides for firms and political disagreement about appropriate policy responses leave considerable space for differential Europeanisation. The crisis adds to these uncertainties and thus reinforces the trend towards differentiation rather than convergence.

Acknowledgements

We are grateful to the anonymous reviewers as well as Ben Milligan, Dimiter Toshkov, Oliver Treib for their helpful comments on a previous version of this text. We have both been members of the Bremen Collaborative Research Centre 597 (‘Transformations of the State’) in the past and benefited from the funding of the German Research Foundation for significant parts of the empirical research in this text.

Notes

1. Case C-212/97 Centros.

2. Case C-208/00 Überseering.

3. Case C-167/01 Inspire Art.

4. Case C-81/87 Daily Mail.

5. Case C-210/06 Cartesio.

6. Case C-371/10 National Grid Indus.

7. Case C-378/10 Vale.

8. The recent Vale judgment C-378/10 touches upon both strands of case law. It combines the question of recognition of a foreign company and the transfer of the seat.