Direct Investment, National Champions and EU Treaty Freedoms: From Maastricht to Lisbon

Within the EU, the legal dimenston of trade in goods and, more recently, of trade in services has gained clear contours. This is less true for cross-border direct investments. Within the system of the fundamental freedoms, cross-border direct investments may fall within the scope of the freedom of establishment (Art 49 TFEU, 43EC), the free movement of capital (Art 63 TFEU, 56EC) and sometimes the freedom to provide services (Art 56 TFEU, 49EC). The free movement of capital has been the last, fundamental freedom to be endowed with direct effect. The investment potential of Sovereign Wealth Funds makes this a very topical subject.

The ECJ has only recently started to develop the full potential of the free movement of capital and the freedom of establishment. This has raised a number of important new questions, including how the two freedoms relate to each other, and how to balance the individuals' rights to market access with the Member States' competence to regulate in the public interest. In particular, the use of state measures to protect strategic or alleged public interests selectively, or to foster national champions, will be considered. Under settled case law, it suffices that a measure renders the exercise of the freedom `less attractive' to find an infringement of the free movement rules. Potentially this opens the door for a broad review of the appropriateness of all non-harmonised mandatory rules contained in general national laws. There is also a general question of when free movement of capital and freedom of establishment may have horizontal effect, a matter raised by the Viking case. The particular situation of third country investors also has to be considered, insofar as they may benefit from the free movement of capital but not from the establishment and servies freedoms. Recent developments in EU company law are discussed too, notably those concerning simple cross-border relocation of businesses as well as those regulating take-overs and mergers.

Overall the book analyses the role of the market and the role of the state with regard to direct investment, delineates the competences of the EU and the Member States in this field and places the debare in the larger context of international direct investment. The book also looks at the changes made to the applicable rules by the Treaty of Lisbon, including the inclusion of foreign direct investment into the Community's trade policy, thus providing an overview of this cutting-edge issue and a reflection on the rationales that should guide the evolution of this field of law.

Joined the European Commission's Legal Service in 1980 and has been a Director there from 2000 to 2010 in charge of the Business Law Team dealing with Establishment, Capital and Services freedoms, in particular in the banking, telecommunications and transport sectors. After university he qualified as a solicitor and practised with Allen and Overy before becoming a partner with Clifford Turner, working successively in their Brussels, Dubai and Paris Offices. He is now Visiting Fellow at the European University Institute's Robert Schuman Centre in Florence.