An analysis of the judgements of the CJEU on the free movement of capital

Abstract

The liberalisation of capital movements and payment transactions has proved to be vital to the other fundamental freedoms. Individuals and companies must be able to obtain capital where best tailored to their needs, while investors and suppliers of capital must be able to offer their resources on the market where conditions are favourable to them. However, the road to making this vision a reality has been a long and winding one. The free movement of capital as envisioned in the Treaty can be said to have been the hardest freedom to achieve. Member States took an extremely cautious attitude in this freedom‟s regard. Despite the fact that the free movement of capital has never attracted the attention it deserves, particularly until the late 1980s, legislation in Member States was significantly different. In the absence of unified regulation it was impossible to achieve the planned functioning of the single market. The CJEU has played an important role in this regard. The First Chapter of the thesis shall analyse the Court‟s role in the evolution of the liberalisation process of the relevant Treaty provisions at the same time referring to the broadening approach the Court has taken in defining „Capital Movements‟ and in determining the scope of application of this freedom. The integrated market for the movement of capital has become more of a reality for the seventeen Member States which participate in the Economic and Monetary Union. This has been achieved through the elimination of exchange risks between these countries. The removal of these risks for the seventeen Member States made it practicable for private investors to move their capital from one Member State to another.