25. 11. 85 Official Journal of the European Communities No C 303/27 
Opinion on the proposal for a 10th Council Directive based on Article 54 (3) (g) of the treaty 
concerning cross-border mergers of public limited companies (J) 
(85/C 303/11) 
On 28 January 1985 the Council decided to consult the Economic and Social Committee, under 
Article 198 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the 
Committee's work on the subject, adopted its opinion on 10 July 1985, in the light of a report by Mr 
Flum. 
At its 229th plenary session on 25 and 26 September 1985 (meeting of 16 September 1985) the 
Economic and Social Committee adopted the following opinion by 66 votes to nine, with nine 
abstentions: 
1. Preliminary comments 
1.1. The Commission is making considerable efforts to 
lay the foundations of greater political integration in the 
Community through the establishment of a common, legal 
taxation and financial system, and by simplifying the 
procedures for the reorganization of the legal structure of 
companies {as referred to in the Commission's March 1970 
memorandum on Community industrial policy), in order to 
create 'a situation more or less equivalent to an internal 
market.... Such mergers are unproblematic providing that 
they do not diminish effective competition and hence the 
freedom of action and choice of suppliers, buyers and 
consumers. This aspect is governed by the rules on 
competition in the Treaties of Rome and Paris'. (Proposal 
for a Directive relating to a common system of taxation 
applicable to mergers, divisions and contributions of assets 
occuring between companies of different Member States, 
OJ No C 39 of 22 March 1969, page 1.) 
1.2. Article 220 of the EEC Treaty refers to the 
desirability of encouraging the development of larger 
companies in Europe as a way of improving competitive­
ness vis-a-vis American and Japanese companies. To this 
end a directly binding agreement on international mergers 
was required between the governments of all the Member 
States. 
1.3. Accordingly a draft was submitted in 1972 
(Supplement 13/73 to the Bulletin of the European 
Communities), but no decision on this or the Statute for 
European Companies (EC Bulletin, Supplement 4/75) was 
reached and the negotiations ceased in 1980. In order to 
align national legislation and prepare the ground for a 
convention the third company law Directive based on 
Article 54 (3) (g) of the Treaty concerning mergers of public 
limited companies was adopted on 9 October 1978, 
harmonizing the procedures for national mergers. 1.4. The main areas of difficulty were the safeguarding 
of the rights of workers' representatives on company bodies 
and the treatment of tax problems. The latter problem is 
expected to be tackled in the near future. As the 
Community bodies for intercompany cooperation attach 
particular importance to the raising of necessary invest­
ment capital and as the proposal for a Regulation on the 
European Cooperation Grouping (2) has been adopted by 
the Council, a further necessary step towards a uniform and 
durable internal Community market is to be taken by 
regulating cross-border mergers. 
1.5. For this reason and on the basis of Article 54, the 
Commission has submitted its proposal for a Directive 
requiring the Member States to enact harmonized company 
law provisions. 
2. Choice of legal instrument to regulate cross-border 
mergers of public limited companies 
2.1. The Committee endorses the Commission's view 
that a Directive on cross-border mergers of public limited 
companies has the following advantages as compared with 
an international convention: 
— guaranteed consideration of the interests of the social 
groups, 
— direct competence of the European Court of Justice. 
2.2. In a Directive of this kind a single piece of 
legislation is implemented through a variety of different 
national laws; the wording (Article 16) of all the national 
implementing provisions ought, therefore, to be published 
separately. 
2.3. The Committee considers it essential that a legal 
instrument regulating international mergers should merely 
set up a framework for aligning the legal form of existing 
links between companies. 
(!) OJ No C 23, 25. 1. 1985, p. 11. (2) OJ No C 103, 28. 4. 1978. 
No C 303/28 Official Journal of the European Communities 25. 11. 85 
3. Provisions regulating the participation rights of 
workers' representatives on company bodies 
3.1. The Committee stresses its support for the desired 
harmonization of participation rights and the view that the 
wishes of company and employee should be given equal 
weight. The proposed provisions regulating the partici­
pation rights of workers' representatives on company 
bodies, and the associated transitional waiver of the 10th 
Directive in accordance with Article 1 (3), are considered to 
be of relevance. 
3.2. Although the Committee is in principle convinced 
of the need for cross-border mergers, it doubts whether .a 
cross-border merger that would be subject to the provisions 
of Article 1 (3) would in practice be carried out. 
3.3. The Committee fears that instead of such a cross-
border merger the companies would make use of the 
existing wide variety of possibilities for cross-border 
economic activities. 
3.4. The economic basis and the effects of the new 
provisions should initially be studied by the Commission. 
Experience at national level should also be studied in order 
to assess the extent of the need for mergers. 
3.5. The Commission's study should focus not only on 
the impact of mergers on business efficiency, but also on 
their implications for workers. 
3.6. The Committee feels that problems connected with 
the Fifth Directive, which is still the subject of discussion 
and consultation, and the arrangements for worker 
participation on company bodies which it provides for, 
cannot be solved by the 10th Directive. 
3.7. It is the view of the Committee that the current draft 
of the 10th Directive needs further revision. 
3.8. The Committee requests that the Commission use 
the following points raised by the various social groups 
represented at the ESC as the basis for a further revision of 
the draft Directive. 
3.8.1. The following views were expressed: 
— Companies based in Member States applying the 
worker participation regulations contained in Article 1 
(3) of the proposal would be at a disadvantage in so far 
as they would be able to act only as the acquiring party 
in a merger. This would have a directly detrimental 
effect on their competitive position. — The worker participation clause gives the rules on 
worker participation a force which they do not have 
under national law. Under national law it is, for 
instance, possible for a change in the legal status of a 
company which is bound by regulations on worker 
participation to result in exemption from those 
requirements. 
— As a result of the worker participation clause the effects 
of the Directive would vary from one Member State to 
another. 
— The worker participation clause should be dropped 
from the revised draft. 
3.8.2. Other points were also made as follows: 
— In the event of cross-border mergers there is no absolute 
guarantee of the retention of workers or their rep­
resentatives on supervisory company bodies. 
— The worker participation rights already existing in 
some Member States may be endangered. 
— References to the Fifth Directive, which is still under 
discussion, give rise to serious doubts as to the 
safeguarding and extension of worker participation on 
company bodies. 
— Worker protection inputs going further than those 
provided for in Directive 77/187/EEC referred to in 
Article 1 (4) of the draft Directive should be the subject 
of a separate article in a revised draft Directive. 
— With reference to the planned protection rights for 
shareholders and creditors, it should be ensured that 
protective provisions reflect the following points: 
— consultation of worker representatives, 
— involvement in the decision-making process of a 
supervisory/administrative board with worker rep­
resentatives, 
— the protection of jobs and social planning require­
ments, 
— the retention of worker representatives on company 
bodies. 
3.8.3. In connection with the need to ensure the 
protection of consumers the following points were made: 
— guarantee provisions should not lapse as a result of 
mergers, 
25. 11. 85 Official Journal of the European Communities No C 303/29 
— cross-border mergers should be checked to ensure 
compatibility with Community rules on competition, so 
as to prevent them leading to the abuse of dominant 
market positions, 
— in order to ensure this, the Directive on cross-border 
Done at Brussels, 26 September 1985. 
1. The Committee has been informed of the latest 
developments in the Council regarding revision of 
Regulation 543/69/EEC (road transport social Regu­
lation). It expresses its appreciation of the considerable 
efforts made by the Commission and the Presidency of the 
Council to obtain agreement on the basis of the compro­
mise proposal worked out in the Committee and endorsed 
by the Parliament. Given the importance of reaching 
satisfactory decisions in this field, the Committee is pleased 
to note the assurance given by the Council President that 
the matter will be examined at Council level by the 
Ministers of Transport and not delegated for de facto 
decision to official level. 
(1) OJ No C 104, 25. 4. 1985, p. 4. 
(2) OJ No C 100, 12. 4. 1984, pp. 3 and 9. 
(3) OJ No C 223, 3. 9. 1985, p. 5. mergers should be backed up by the introduction of the 
planned anti-trust controls. 
The Committee considers that these points raised by the 
ESC's social groups provide the Commission with a basis 
on which to revise the draft Directive on cross-border 
mergers of public limited companies. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
2. The Committee hopes the Council of Transport 
Ministers will be able to reach a final decision on the 
revised Regulation at its next meeting on 14 November 
1985. 
3. With a view to the discussions on that occasion the 
Committee considers it important to emphasize the 
following points. 
4. Effective implementation of and respect for the 
provisions of the Regulation requires a proper balance 
between simplicity and flexibility. The Committee con­
siders this balance was struck in its own compromise 
proposals, by which it stands, and which are essentially as 
follows: 
— driving time: nine hours daily, 45 hours weekly 
average; 
— rest periods: 12 hours daily, 48 hours weekly average, 
with appropriate exceptions. Additional opinion (J) on the 
— proposal for a Council Regulation amending Regulation (EEC) No 543/69 on the 
harmonization of certain social legislation relating to road transport and Regulation (EEC) No 
1463/70 on the introduction of recording equipment in road transport (2) 
and on the 
— draft Council recommendation on the implementation of the social regulations in road 
transport (2) 
(85/C 303/12) 
On 27 February 1985 the Economic and Social Committee delivered an opinion on the 
abovementioned proposals. 
The Commission subsequently amended its original proposal on 13 August 1985 in accordance 
with the second paragraph of Article 149 of the EEC Treaty (3). 
At its 164th meeting held on 11 September 1985 the Section for Transport and Communication 
approved the request made by the rapporteur, Mr L. J. Smith, to draw up an additional opinion in 
accordance with the third paragraph of Article 20 of the Rules of Procedure. The draft opinion 
submitted by Mr Smith was then approved unanimously. This procedure nevertheless still needed 
to be approved by the Bureau. (The Bureau gave its approval on 24 September 1985.) 
At its 229th plenary session (meeting of 26 September 1985) the Economic and Social Committee 
adopted the following opinion with no votes against and four abstentions: