The Golden Power as a legal weapon of hybrid sovereignty

Born as a residual transition instrument from the privatisations, in twelve years the Italian golden power has become one of the most sophisticated instruments of European economic sovereignty. A trajectory worth naming in full.

The origins: from state participations to the golden share

For much of the post-war period, the Italian economy was characterised by a pervasive state presence. The system of "state participations" — structured around IRI (1933), ENI (1953), EFIM (1962) — controlled steel, telecommunications (STET-SIP), energy (ENEL), air transport (Alitalia), shipbuilding (Fincantieri), defence (Finmeccanica). The "entrepreneur state", in its most cartoonish form, made IRI "the largest conglomerate in the free world".

The crisis of this model intertwined, at the European level, with the construction of the single market (Single European Act 1986, Maastricht 1992) and with international pressure for financial liberalisation. The Italian response was Law 30 July 1994, no. 474, which regulated the divestment of state participations introducing, in Art. 2, the first "special powers" — the so-called golden share.

The model was contractual: the state reserved consent to the acquisition of relevant participations, veto over strategic statutory resolutions, the appointment of a director. But the precondition was a statutory clause in the privatised company recognising such powers. A "weak" golden share, in the sense that its fate depended on statutory amendments which the shareholders' meeting could resolve upon.

European pressure

Between 2000 and 2009, the European Court of Justice systematically dismantled the various versions of golden shares across Europe, considering them unjustified restrictions on the free movement of capital (Arts. 63 ff. TFEU). Italy faced three infringement procedures, the best-known of which led to judgment C-326/07 (Commission v Italy, 2009), which declared incompatible the DPCM of 10 June 2004.

Brussels' pressure forced Italy into a structural rethink. The answer came with Decree-Law 15 March 2012, no. 21 (converted into Law 11 May 2012, no. 56), marking the transition from the "statutory" golden share to the "administrative" golden power. A substantive shift: powers are no longer anchored to available statutory clauses, but to legislative provisions configuring a state authoritative power, exercisable irrespective of shareholder consent.

The structure of DL 21/2012

The 2012 decree distributed special powers across three articles, each with its own rationale. Art. 1: defence and national security sectors, broader powers (veto, opposition to acquisition, conditional prescriptions). Art. 2: essential public services (energy, transport, communications), analogous powers but with stricter preconditions. Art. 3: common provisions on procedure (prior notification, instruction by the Coordinating Group at the Presidency of the Council, final decision by the Council of Ministers).

In subsequent years the application perimeter progressively expanded through a near-continuous series of interventions: the 2014 implementing regulations, the 2017 extensions to semiconductors, the inclusion of 5G in 2019, the 2020 pandemic extension (DL 23/2020 "liquidity"), and the 2021-2024 updates bringing healthcare, strategic data, artificial intelligence, critical raw materials and space technologies into the perimeter.

The Europeanisation: EU Reg. 2019/452

In parallel, the European Union built its own architecture for screening foreign direct investments with Regulation (EU) 2019/452, instituting a cooperation mechanism among Member States and the Commission on the assessment of investments potentially at risk for security or public order. Unlike the US CFIUS, the European regulation does not establish a centralised authority, but values coordinated action by Member States — an architecture coherent with the principle of subsidiarity but requiring distributed technical capacity.

Italy has proven one of the most active European systems in applying the new framework: in the 2020-2023 period it activated the golden power in more than 250 proceedings, second only to France and Germany by volume. Such application intensity reflects the administrative maturity of the instrument and its progressive normalisation as an ordinary element of Italian industrial policy.

Paradigmatic cases

Four matters illustrate the application variety of the contemporary golden power. The Vivendi-Telecom Italia matter (2017-2024) saw the exercise of special powers to safeguard the integrity of the unified telecommunications network and prevent French control over Italian strategic infrastructure. Defence sector operations (Pirelli-Sinochem, shipyard operations, semiconductors) consolidated the use of golden power as an instrument for protecting industrial-military know-how. Robotics and artificial intelligence saw interventions on acquisitions of small Italian technology companies by Chinese and US groups. Cloud and strategic data introduced an entirely new terrain, with the establishment of the National Strategic Hub (PSN) and the assessment of cross-border cloud operations.

Contemporary tensions

The mature 2024 golden power raises significant tensions that doctrine is still working through. First tension: compatibility with EU law. The golden power is an instrument restricting the free movement of capital (Art. 63 TFEU) and requires qualified justifications (public order, public security). The case law of the Court of Justice has admitted "proportionate and necessary" restrictions, but with strict scrutiny. The Italian challenge is to demonstrate the proportionality of an expanded golden power without falling back into the old golden share casework.

Second tension: transparency. Golden power decisions are largely covered by industrial and national security secrecy. The judicial review of the TAR Lazio and the Council of State is exercisable but on acts that are often partially classified. The effectiveness of parliamentary control through COPASIR is limited. Under this profile, golden power shares with other instruments of hybrid sovereignty (intelligence, cyber perimeter, computer trojans) a structural transparency deficit.

Third tension: the political nature of discretion. The distinction between technical assessment of strategic risk and political choice by the Government is subtle. Golden power is, by nature, a "political" instrument in the strongest sense: the Council of Ministers exercises broad discretion on which operations to consider hostile and which not. This is not a defect of the system — it is an intrinsic feature of economic sovereignty — but it requires institutional maturity to be used well.

What it means for those structuring operations

For those operating on the Italian market — industrial groups in M&A, funds in cross-border operations, advisors structuring acquisitions — the maturity reached by the golden power imposes some concrete operational changes.

First: the golden power assessment must be an integral part of preliminary due diligence, not a final check. Identifying in advance whether the target asset falls within one of the sensitive sectors (with the expanded 2021-2024 perimeter, this is now true for much of advanced Italian industry) substantially changes the deal structure.

Second: the prior notification under Art. 2-bis of DL 21/2012 must be designed as a contractual element, not an administrative formality. Seller representations and warranties must cover possible negative outcomes of the proceeding, with calibrated Material Adverse Change clauses.

Third: for foreign investors from non-EU states, structuring the operation through EU vehicles can lighten the inquiry (Art. 4 of EU Reg. 2019/452 distinguishes EU from non-EU investors), but does not eliminate the merits assessment when the asset is qualified as strategic.

Fourth: the informal pre-notification phase before the Coordinating Group at the Presidency of the Council has become consolidated practice. Facing it without specialist assistance means, at best, delaying the operation by months.

A closing on economic sovereignty

The golden power is a significant case study of "hybrid sovereignty" because it is an instrument simultaneously legal and economic, authoritative and contractual, Italian and European. It reflects the transformation of the very concept of national security — from traditional sectors (defence, public order) to contemporary ones (energy, telecommunications, data, AI) — and the consolidation of the Prime Minister's role as the central authority of the economic security system.

It is a legal weapon, in the literal sense of the term: an instrument of economic warfare conducted through the law. It must be used with the maturity it requires. And it must be understood by those structuring operations in Italy, because ignoring it today means exposing oneself to deal-breaking consequences that could have been avoided.