Professor Mestmäcker opened his seminal work on Verwaltung, Konzerngewalt und Recht der Aktionäre with the following citation: “The directors of such [i.e., public] companies … being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private co-partnery frequently watch over their own … Without an exclusive privilege they have commonly mismanaged the trade. With an exclusive privilege they have both mismanaged and confined it”.

The 1990s witnessed the European début of a series of securities markets for high-growth companies adopting as their regulatory model the National Association of Securities Dealers Automated Quotation (NASDAQ) market in the USA. These markets are generally known as New Markets.

The above lines were written by Karel van Miert, acting as the competent Commissioner for Competition in Brussels from 1993 to 1999. In short, unequivocal words, he describes the attitude of politicians, publishers and media to the dispute on the German and Austrian book price maintenance, realized in the German "Law for Safeguarding the National Book Price Maintenance" of 30 November 2000 and the Austrian "Federal Law on the Price Maintenance of Books". Both acts were aimed at rescuing the maintenance of book prices, after the expiration of the last transitional period for the adaptation to Article 81 EC granted to the publishers by the Commission.

As old age security has become a major concern, supplementary pensions are an issue of great political interest, debated heavily at the national level within the EU Member States as well as at the supra-national level of the European Union. Increasing labour mobility has made supplementary pension systems, suited for transnational work, a subject of European social policy. The European capital market and the Euro promise access to capital for all pension schemes operating on the basis of accumulating and investing capital, thus directing the economic development of pensions towards capital-based systems.

This article deals with the European legislation on supplementary pensions in the context of both their “social dimension” and their “economic dimension”. The “Safeguard” Directive 98/49/EC is aimed at eliminating obstacles to labour mobility resulting from the specific legal design of national systems of supplementary pensions and diversity in Member States. In contrast, the proposal for a Directive on Institutions for Occupational Retirement Provision (IORP) is aimed at liberalising cross-border investment and management services of IORPs, and to prepare the liberalisation of capital investment, by setting a common standard for supervisory systems, funding requirements and investment rules. Both Directives are analysed in the wider context of the European legislation on supplementary pensions, also assessing, in particular, their likely impact on the German system of retirement provision.

A technology often reaches perfection when its successor is already in place. Miraculously speedy and reliable punch card readers were finally available on the market when demand shifted to personal computers, to cite only one example. Do constitutions follow the same evolutionary pattern? Constitutional law, in general, and the doctrine of fundamental freedoms, in particular, are in admirable shape. Their dogmatics have been amply tested; they are elegant and rich. But they have been developed for the nation state. Yet governance reality is increasingly different. The state is competing with foreign, international and private governing authorities, or it is joining them in hybrid efforts. Will deconstitutionalisation ensue? Or will the existing constitutions be able to face, or even alter, the new reality?

Opening up markets has been one of key endeavors of Ernst-JoachimMestmäcker's endeavors. But what to do if markets have yet to emerge? Biotechnology is one of the key emerging technologies and exemplifies the major problems of innovative industrial activity in Europe. Broadly defined, biotechnology includes “ …any technique that uses living organisms (or parts of organisms) to make or modify products, to improve plants or animals, or to develop microorganisms for specific uses”. In light of its approach on a genetic and molecular level biotechnology is research-intensive and driven by innovation. The Commission's Green Paper on Innovation identified the biotechnology sector as one of dynamic growth and importance for Europe. However, a study by Ernst & Young shows that as of 1997 the United States outperforms all other countries in the biotech sector in terms of its number of companies and employees as well as in terms of sales and research and development expenditures. In addition, all top ten products were developed in the US, and most of them sold by US companies. Thus, Europe lags behind the US in most indicators of economic performance in biotechnology and therefore biotechnology has been identified as an area of prime importance to the future economic development and competitiveness in Europe. For example, in Germany quite successful basic research has been conducted over the years at universities and research institutes. However, these innovative advances in research could not be translated into success on the German pharmaceutical market. What then are the ingredients of the American success in biotechnology?

The present short paper is written in honour of Professor Mestmücker on the occasion of his birthday. How can one pay tribute to his activity? Perhaps by choosing a topic that has been the centre of his interest for several years: the role of the state and the change in this role. The role of the state and its changes have been the subject of books and articles by Professor Mestmäcker and many other authors. It was one of the main issues at the meetings that German and Hungarian lawyers held every second or third year, organised by the Max-Planck Institut fur auslandisches und internationales Privatrecht, Hamburg, and these meetings have assisted in the transformation of law in Hungary. I remember that in the 1980s, during one of these colloquies, some questions of a new Hungarian legal regulation, based on elements of market economy, were being discussed and Professor Mestmäcker remarked that the new rules were important but they still seemed to belong very much to a planned economy. After having thought it over one had to come to the conclusion that the remark was correct.

Our honoree, Professor Mestmäcker, in applying Albert 0. Hirschmann's formularization of “exit” and “voice” to company law, places “exit” as a compensation claim under such law (Anspruch auf Abfindung), and clearly points out the difference between the function of public and close companies. Although Japanese company law does not expressly state as much, “exit” means the repayment of one's holdings. As such, in principle, it is impermissible from the standpoint of protecting company creditors. However, in certain circumstances, small shareholders opposing a majority decision may require the company, for their protection, to buy back its shares so they can leave that company (appraisal rights).

It surprises few people today to see comments about the profound and growing extent of international economic linkages and interdependence. The causes of these developments are numerous: incredible advances in efficiency of communication, extraordinary reductions in transport costs, growing prevalence of instant tele and cyber transactions, treaty and other norms causing reduction of governmental barriers to trade, an economic climate more favorable to principles of markets economics, cross border influences of competition which have driven increases in production and service efficiencies, and last but not least, the blessing of relative peace in the world.

A cornerstone for the take-off of the development towards competition in European telecommunications markets was the Commission of the European Communities' British Telecom decision in 1982 and its confirmation by the European Court of Justice in 1985. According to this decision, British Telecom should no longer be permitted to forbid the high-speed forwarding of telex messages between foreign countries by competitive agencies in Great Britain. The procedural setting of this case was most unusual because the Italian government and not British Telecom appealed against the Commission's decision. Moreover, the British government intervened, taking sides not with the Italian government, but with the Commission. The important message of the British Telecom case has been that the Commission of the European Communities is able to apply the Treaty of Rome's competition rules in the European telecommunications administration based on the public law of the different member countries.

Money as something corporeal is represented in coins and banknotes, which the legislator defines to be legal payment. They are fungible goods and therefore it is necessary to have regard to the principles of the law of property for their transfer. It is impossible for there to be more coins and banknotes than the legal authorities (the government is responsible for coins, the central bank is responsible for notes) have issued into circulation; were it to be more, it would be counterfeit money.

After World War II it became obvious that the American way of allowing an open and highly competitive economy was superior to the traditional German system of concentrated groups of companies, cartels, and regular government interference. For the organization of large firms it was the "Berle-Means" corporation1 which presented itself as the model for reforming German corporate law. In fact, the separation of ownership and control offered considerable advantages. Management functions were awarded on the basis of merit, abandoning the feudal rule of inheritance. Investors were able to reduce risk by diversification. The dispersion of ownership allowed managers to escape the control of banks or other financial institutions, enabling the corporation to become an autonomous player in competitive markets. Management had to serve the interests of all - and not only of big shareholders; it was held accountable by the judicial enforcement of fiduciary duties, the monitoring of independent directors and the emerging market for corporate control. ErnstJoachimMestmäcker had been the first German author to point to this model; in his path-breaking analysis he confronted the American public corporation with the corporatist German structures and suggested far-reaching changes, mostly following the American example.

“A well-drawn stockholders' agreement entered into contemporaneously with the formation of a corporation is (generally acknowledged to be) the most effective means of protecting the minority shareholder”. In authorizing such agreements courts have come to recognize the needs of shareholders in close corporations who want to protect themselves from each other and from hostile invaders. Nowadays, shareholders experience little difficulty in enforcing voting or pooling agreements. But courts feel much more uncomfortable about the implications of shareholder agreements defining the business strategy of the corporation and interfering with the core function of the directors. Both, under German and US states' laws there is uncertainty about the shareholders' freedom of contract and the ground rules governing a contractual relationship between shareholders. This contribution will examine the common intellectual origins of shareholders' agreements under German and US laws. It will demonstrate where German and US corporate laws began to move apart and it will analyze to what extent one legal system might instruct the other.

In a recent article in EBOR, Ernst-JoachimMestmäcker remarks: “In a good drama we expect to be surprised in the third act by the revelation of hidden conflicts as well as the identity of the play's true hero.”

Competition is a value in itself. It is not directed towards specific objectives.

Market economy can be fitted into the categories of the theory of decision-making. Decision-makers are individuals, not a collective entity like the state. The objects of decision-making are arbitrary and therefore necessarily unknown. Legally speaking, the participants are making use of their personal autonomy. The procedure of decision-making is the contract, the voluntary reaching of an agreement with another party. The order achieved through such a process cannot be directed towards specific objectives. The methodological reason for this is: freedom would be abolished if one attempted to define its content in advance. Market organisation through competition is the spontaneous order that results when people coordinate their actions by way of mutual adjustment in transmitting and receiving information. Only statements about the general structures of such a system (pattern predictions) are possible. Such a systemt results in mutual advantages for the individuals involved, and in economic overall advantages, as a generic term for growth, inducement and unfolding of technological progress and efficient allocation. This general social task that is achieved by the exercise of individual freedom remains recognisable, even though it may be difficult to discern in the individual case.