Chapter 11 - The Takeover Directive

Summary

Whereas the case study in the previous chapter looked at the power of the European Parliament to control the EU executive, this chapter looks at the power of the parliament to make legislation. We focus on the Takeover Directive, which is one of the most high-profile pieces of legislation ever to pass through the European Parliament. One reason for the public attention to this particular bill was the dramatic tied vote in the third reading in the parliament in July 2001, which meant that the first attempt to pass the legislation failed. But even without such an unusual event, the Takeover Directive represented a major piece of EU regulation because it aimed to establish common European-wide rules governing shareholders’ rights and defensive measures in the event of takeover bids. The bill consequently addressed one of the central differences between the so-called ‘Anglo-Saxon’ and ‘Rhenish’ models of capitalism.

To test our argument in this case the chapter is organised as follows. Section 11.1 presents a short history of the Takeover Directive, from its origins in the 1970s to its eventual adoption in April 2004. Section 11.2 then discusses some descriptive evidence of how MEPs voted in three key votes on the legislation, and the findings of the existing research on the passage of this directive in the European Parliament. In Section 11.3 we undertake a statistical analysis of MEP voting behaviour in these three votes. Section 11.4 contains a brief conclusion.