European Union ministers have approved new corporate takeover rules which triggered sharp divisions in Brussels.
The European Commission's lofty ambitions are being checked
The legislation is a compromise between member states and overrules more radical proposals earlier set out by the European Commission.
The vote marks a second triumph of ministers over commissioners in a week.
The commission is still reeling from the failure of ministers to sanction France and Germany for breaking the rules of euro membership.
"If the council continues to take decisions like that, the
European Union will never attain its fixed objective to become
world's most competitive economy by 2010," Frits Bolkestein, internal market commissioner and architect of the original draft directive said.
But ministers from EU member states welcomed the result as bringing an end to a divisive saga.
The takeover directive, which aims to boost shareholder power and limits the rights of European companies to protect themselves from takeovers, has been 15 years in the making.
Early proposals by Mr Bolkestein were heavily watered down by member states after lobbying from powerful national flagship companies, such as Germany's Volkswagen and Sweden's Ericsson.
Member states insured that key clauses in the directive that would have brought EU takeover practice closer to the US model were made optional.
Mr Bolkestein's frustration at the extent of compromise and political horse-trading is such that he initially proposed withdrawing the plan altogether.
Frits Bolkestein may have to put a brave face on defeat
The commission rejected that option, but refused to give its endorsement to the limper proposals.
That meant EU ministers needed a unanimous vote on Thursday to pass the legislation.
Consensus was eased by deals between members.
Germany, the most vigorous opponent of Mr Bolkestein's proposals, teamed up with Nordic countries to block outright bans on certain protective measures.
These include so called "poison pills" - clauses in company charters that make hostile takeovers prohibitively complicated or expensive - and shares with multiple voting rights.
Crisis of confidence
Britain also backed Germany in exchange for reciprocal support in blocking commission rules on employment rights for temporary workers.
An earlier version of the merger code was killed off in 2001 by the European parliament, which had also been effectively lobbied by European industries fearing hostile foreign takeover.
The 20-member Commission, which has representatives from each state - and two from the five largest EU countries - is supposed to act as a pan-European executive, but is now facing a crisis of confidence as it competes for power with the councils of ministers from member states.
Earlier this week EU finance ministers defied the Commission and voted not to exercise their power to impose fines on France and Germany for exceeding budget deficit rules laid down in the stability pact for the European single currency.