- Corporations, Globalisation and the Law series
Chapter 5: Hypothesis for (Truly) Supranational Developments
The arguments developed in the previous chapter ultimately rely upon an interpretation of EC law’s ultimate objectives and upon three basic assumptions. According to the reasoning followed: (a) the Treaty aims at creating a system of undistorted market competition among all business enterprises operating within the Community market, to ensure the proper functioning of the internal market; (b) equal possibilities of free movement from one Member State to another for all EC enterprises are an essential component of this undistorted market competition; (c) differences between the national laws of Member States may cause distortions when they either create obstacles to such free movement or induce businesses into ‘forum-shopping’ practices damaging stakeholders; (d) to eliminate these distortions (which might derive from the legal competition between Member States) the EC institutions, in accordance with the subsidiarity principle, are empowered to harmonize national laws; but (e) legal competition among national jurisdictions of Member States is, by definition, compatible with EC law objectives – and may be a valid alternative to harmonization – when it does not distort market competition among enterprises. The assumptions made are that (a) businesses tend to exploit differences between national company law and taxation regimes to move from one state to another without economic or market-related reasons, to increase their profitability at the expense of third parties;1 and (b) they would be attracted by supranational schemes offering (at least, on balance) more favourable alternatives than the national ones in these two crucial sectors. If these assumptions are accepted, the interpretation...
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