The Gazette 1974

as to become equivalent. The time when the company was merely regarded as a means of profit maximisation has gone. The company has become an instrument of social progress which can fulfil its functions only if the forces of capital, management and labour are institu- tionally joined together and work harmoniously and smoothly within the framework provided by the law. In the Commission's view, the European economy should be built upon a system of co-operation between capital and work rather than on confrontation and conflict. Shareholders' meetings Apart from these minimum rules on workers' partici- pation in management control, the Fifth Directive defines the organisation of and procedures of share- holders' meetings, the matters on which the shareholders must decide, the conditions under which somebody may act as proxy for shareholders, and the role of the auditors. As you will appreciate, these proposals may have to be reconsidered in the light of the accession to the Community of the new members, and the Commis- sion are certainly open to new suggestions and ideas. It is certainly not easy to find appropriate solutions to the problems of regulating the structure and affairs of public companies, which we regard of great impor- tance in view of the crucial part they play in the economic life of the Community. Why were so many Directives required? Perhaps you are wondering why the European Com- mission proposed several Directives and not just one or two and why two or three more Directives are in the making There are several answers to this. Firstly, we cannot do everything at the same time. Secondly, the objectives of the EEC Treaty can be reached only gradually and step by step. The Commis- sion has to take into account the economic, social and political situation existing at a particular time. Priori- ties have to be fixed and revised from time to time. Finally, experience shows that the institutions of the Community are not prepared and not willing to approxi- mate the law on public companies at once and by one, two or three Directives. On the other hand we agree that co-ordination should not be done piecemeal. Sub- jects which belong together should be approximated at the same time and if possible by the same Directive. National Companies Acts should not have to be changed too often. The Commission is trying to meet these demands by proposing not many but few directives, each of which would co-ordinate a substantial and possibly closed part of company law. In addition too

frequent changes in company law could be avoided by requiring that effect is to be given to a group of two directives simultaneously. Approximation of principles or of laws? Another criticism often raised is that detailed approxi- mation may produce unintended and unforeseen dis- tortions when judged by different legal systems and in different national circumstances. Instead of trying to achieve complete alignment, the Community should concentrate on approximating those elements—as yet undefined—which would be generally regarded as essential to a common system of company law. Directives should initially be confined to stating cer- tain basic principles, and should leave each Member State free to impose more exacting requirements in accordance with its own current standards. If approxi- mation was not to go into some detail but confined to principles only, the danger of distortions became very real. Experience shows that no Member State so far has been ready to accept that approximation should be limited to principles or general rules because they would not be applied with the same result in the different Member States. In addition, every rule has its exception. Without defining such exceptions, the law would become too stringent; and in defining such ex- ceptions, one has to go into some detail. Thus detailed co-ordination does not necessarily mean rigid rules, but rather to build in flexibility by taking care of special situations. In fact, government experts do insist in many cases much more than the Commission's staff on detailed regulation. Minimum, maximum and fixed rules Another problem frequently discussed is whether a Directive should just contain minimum rules or fixed rules and whether it should offer several equivalent solutions leaving the choice to the national legislator. I think there is no general answer to these questions. They should be decided case by case in a pragmatic way. Some articles give minimum requirements, some maximum requirements. Some give a choice to the national legislator, others do not. But all the Commis- sion's proposals are based on the belief that something more than an approximation around the average re- quirement is needed, and every proposal has added at least one more potential requirement to each Member State's array. If approximation of company law is merely successful as a technical exercise it would be a failure. We strive for more. The spirit of the new com- pany law in Europe must reflect the spirit of the new economic order, an order built on the concept of social responsibility.

EEC and Fundamental Rights By JOHN TEMPLE LANG, M.A., Solicitor

This amendment to the Constitution enabled the Oireachtas to confer legislative, executive and judicial powers on the Community institutions, and this was done by the European Communities Act, 1972, in accordance with the Treaty of Accession between the nine States which are now members of the Community. The constitutional amendment went further than this, 201

Under the Third Amendment to the 1937 Consti- tution of Ireland, which enabled Ireland to join the European Communities, no provision in the Consti- tution can invalidate any law enacted, act done or measure adopted by the Community institutions, or by the State if the law, act or measure is necessitated by the obligations of membership of the Communities.