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The Legality of the 'Golden Share' under EC Law

38 Pages Posted: 27 Jun 2009  

Nadia Gaydarska

affiliation not provided to SSRN

Date Written: March 1, 2009


Privatisation is still an ongoing process for most of the Member States of the European Union. The beginning of the privatization initiatives started from the United Kingdom during the Margaret Thatcher’s time. Liberalization process was seen as a way to achieve a high level of competitiveness of the market. Thirty years later the privatization is still an issue of high importance. The transfer of the state assets to the private sector needs to be ensured and secured through the retention of a certain state control especially over the formerly state owned enterprises which provide services of general economic interest. According to the EC Treaty when the European Internal Market is concerned the fundamental principle of free movement of capital should be respected. Among the possible restrictions of this principle is considered to be the use of the so called "golden share", special right that is used by the government in order to keep a certain level of control in the management of the privatized companies.

During the last ten years it is very much arguable to what extend could be proved that the use of the "golden share” device is legal and in line with the EC Treaty, the provisions of the secondary EC legislation and the existing ECJ case law .

The aim of this article is to give a brief overview of what the reasons for the application of the "golden share" as a legal tool are, to define what their legal nature is, to identify how and when this legal mechanism could be used and accepted as permissible and when it is considered to be a restriction on the free movement of capital principle. The article is also analyzing the decisive approach and the proportionality test used by the ECJ.

Keywords: internal market, free movement of capital, privatisation, golden shares, ECJ case law

Suggested Citation

Gaydarska, Nadia, The Legality of the 'Golden Share' under EC Law (March 1, 2009). Maastricht Faculty of Law Working Paper , Vol. 5, No. 9, 2009. Available at SSRN: or

Nadia Gaydarska (Contact Author)

affiliation not provided to SSRN ( email )

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