FRANKFURT -- Germany's conservative Christian Democrats said on Monday they did not plan to increase the stake held by the state of Lower Saxony in Volkswagen, after winning regional elections over the weekend.
"The VW stake is not an issue," CDU General Secretary David McAllister told reporters in Hannover.
Newly elected CDU state premier Christian Wulff had said last month that if elected he would raise Lower Saxony's near-20 percent stake in VW, in order to maintain the state's influence over the firm if the EU banned a controversial law limiting voting rights in the group.
German Chancellor Gerhard Schroeder, a former premier of Lower Saxony, has resisted efforts by Brussels to force changes in the "VW law", which effectively gives the state where Europe's largest carmaker is based a blocking majority.
A source close to the issue told Reuters last month that draft documents produced by the European Commission's legal service suggest that the Commission may not have a strong case in arguing that the law contravenes EU rules.
Analysts say the law effectively prevents a takeover of VW and say its abolition could change investor perceptions of the company and have a positive impact on its share price.
Schroeder's Social Democrats suffered their worst performance since 1945 in his northern home state of Lower Saxony, where they lost power, as well as in the central state of Hesse in regional elections over the weekend.
Winning Lower Saxony increases the CDU's majority in the Bundesrat upper house of parliament, where the 16 states are represented, and makes it harder for Schroeder's centre-left coalition to pass laws without conservative backing.