European Parliament

Parliament has strongly supported efforts in favor of the liberalization of capital movements by supporting  the implementation of the Capital Markets Union.

The European  Parliament consider that this liberalization must be more complete within the European Union than with the rest of the world, to ensure that European savings boost European investments as a priority

Liberalization of capital must be acompanied by the full liberalization of financial services and a harmonization of tax laws if we want to create a unified European financial market

Also a resolution has been adopted  in order to reach those objectives. That resolution stipulates:

   Removal of existing barriers to cross border financing.

   More prominent role for the European Securities and Markets Authority.

 The resolution also emphasize the need of an equal footing among members in order to improve the distribution of capital in the EU.

Results

The application of the free movement of capital has been progressive, distinguishing three phases: the sixties, the eighties and the definitive regime in 1994.

First directive on capital (1960) eliminated restrictions on certain types of private and commercial capital movements:

Real state acquisitions and the acquisitions of securities traded on the stock market.

Short / Medium term credits related to comercial operations.

Some other member states went further introducing unilateral national measures that abolished all restrictions on capital movements ( like Germany or UK).

These restrictions helped to achieve  a greater progress and general liberalization in the single market.

Later in 1988 a new directive eliminated internal restrictions between the member states in relation to the movement of capital, and as a result of those restrictions the financial space in the European Union was developed.

And finally in 1994 the definitive regime enters into force stipulating restrictions and exceptions  mainly considered for capital movements related to third countries, for example  all member states  will be able to maintain the existing restrictions with third countries (Art. 64 of TFUE). In this way it is clear that for third countries this freedom does not extend to the right of establishment or the provision of financial services unless the member states allows it.

 


 As a result of all the regimes and restrictions that have been applied since 1960 until 1994 we can say that The freedom of movement of capital has been the latest freedom but the widest that exists in the European Union as it also extends to third countries.