European Union rules aimed at encouraging cross-border takeovers may need revamping sooner than expected due to protectionist member states, the bloc's executive body said today.
The EU rules on takeovers were heavily watered down by the European Parliament and member countries such as Germany.
The original aim of the rules was to help create a more efficient capital market for investors and companies to improve the 27-nation bloc's competitiveness.
But the rules offered many "opt outs", enabling member countries to skirt core provisions and keep barriers in place.
"A large number of member states have shown strong reluctance to lift takeover barriers," a report on the rules said. The number of countries implementing the directive in a seemingly protectionist way is unexpectedly large, the report added.
"In the light of this evaluation, the revision of the directive scheduled for 2011 may, if necessary, be brought forward," the report concluded.
Frits Bolkestein, the-then EU internal market commissioner who drafted the rules, effectively disowned the final outcome. His successor, Charlie McCreevy, said recently ahead of today's report that he had no desire to revisit the directive any time soon.