HANOVER, Germany -- Newly elected Lower Saxony state premier Christian Wulff said late on Wednesday a European Union Commissioner had told him the EU would decide next Wednesday to start legal action against Germany over a law that caps voting rights of shareholders in carmaker Volkswagen.
Speaking to journalists, Wulff quoted Internal Markets Commissioner Frits Bolkenstein as telling him in a telephone conversation he wanted a decision because his recent talks with German government leaders in Berlin had made no headway.
The German government, like the state government in Lower Saxony which is the main shareholder in Volkswagen, disagree with Bolkenstein's view that the so-called "Volkswagen Law" is incompatible with EU law.
EU sources in Brussels have already said the Commission may decide next week to start legal action, saying it was possible the Volkswagen Law would be on the Commission's agenda next week.
The EU executive has argued that the law, which limits the voting rights of shareholders in VW to 20 percent, is a barrier to freedom of investment and breaches EU treaty rules.
The state of Lower Saxony has just under 20 percent of VW's common stock and 20 percent of the voting rights.
The 40-year-old law effectively gives Lower Saxony a blocking minority which helps it safeguard local jobs and makes sure the company does not fall under control of a foreign manufacturer.
The EU source had said senior Commission officials would first decide at a preparatory meeting on Monday whether the 20 members of the EU executive would debate and rule on the law on Wednesday at their regular weekly meeting.
Legal action against Germany over the law would be a further step in the Commission's fight against government-held golden shares and similar schemes which prevent foreign takeovers of national champions.
Bolkestein renewed his attack on the VW law earlier this month, even though some sources had said the EU executive might not have a strong case against the legislation.
Bolkestein said during a visit to Germany that he wanted to determine the position of the conservative Christian Democrats, who won regional elections in Lower Saxony earlier this month.
Wulff won election as state premier on February 2 and takes office on Tuesday. Wulff reiterated his position during the election campaign that he would try to maintain the same level of influence in VW as previous state governments have had.