ATTEMPTS to create a European company statute, frustrated by disagreements since it was originally conceived in 1970 by the European Commission, took a substantial step forward yesterday with the publication of new proposals on worker consultation and involvement.
The failure of member states to reach agreement on a common company statute, allowing firms with subsidiaries in more than one country to register in one country alone, has been a constant source of criticism from the business community. The Commission has put the cost of the inefficiencies created by duplication and legal ambiguity to EU business at £24 billion a year, although one business source was sceptical.
Business has also argued that the requirement for companies to file returns under separate national systems, each with differing rules, has made consolidation of accounts difficult. A new, uniform and transparent system should make it easier to attract investment.
A high-level working group, established by Commissioners Mr Padraig Flynn and Mr Mario Monti, and chaired by the former Commissioner, Viscount Etienne Davignon, has proposed a way through one of the critical impasses of the negotiations, the insistence of Germany that its system of worker participation and co-determination should not be undermined in the new European company statute.
Other member states refused to contemplate as extensive a system of worker rights as practised in Germany.
The compromise should make it possible for ministers to broach the other thorny issue holding up a deal - the problem of where the European company should pay its taxes. Officials yesterday warned the process would not be easy.
The compromise should also make possible movement on other common European statutes for associations, mutuals and co-operative societies.
The Davignon Committee suggests that the form of worker participation in each company would be subject to negotiation and agreement between each management and its workforce. Only if after a specified time there was no agreement would certain minimum standards of consultation and worker representation be required.
Companies which felt that the minimum standards were too onerous would have the right to continue operating under the current national regimes.
