The European Parliament today rejected a corporate takeover code 12 years in the making, dealing a stunning blow to the European Union's financial market reform plans.
The vote on the proposed text was tied 273-273 with 22 abstentions. EU Parliament President Nicole Fontaine declared the text had been rejected because it failed to obtained the required simple majority of votes cast.
The code was aimed at aligning takeover rules across the 15-nation bloc and giving shareholders a bigger role in deciding the fate of a company targeted by a bid.
But the planned text ran into fierce opposition from Germany and its powerful group of 99 EU deputies.
The European Commission will now have to redraft the legislation from scratch, which may take years.
European Internal Market Commissioner Mr Frits Bolkestein said in a statement. "Twelve years of work have been wasted by today's decision...It's tragic to see to see how Europe's broader interests can be frustrated by certain narrow interests."
Irish MEP Mr Pat Cox immediately called on the European Commission to redraft a proposal on takeovers at the earliest opportunity.
"It is clear in the form presented that the directive has now fallen. I hope we do not abandon the attempt," he told the Parliament.
It was only the second time the Parliament had ever rejected a proposal after a compromise was found between EU governments and legislators in a so-called conciliation committee.
The code was eagerly awaited by merger and acquisition lawyers and investment bankers who did not want to see any further delay in the legislative process.