What is the free movement of capital?

The purpose of free movement of capital is to enable an efficient cross-border deployment of physical and financial capital for investment and financing purposes.

What does movement of capital mean?

‘Capital movements’ are all the operations necessary for the purposes of capital movements carried out by a natural or legal person, including direct investments, investments in real estate, operations in securities and in current and deposit accounts, and financial loans and credits. …

How is the free movement of capital regulated?

The Maastricht Treaty introduced the free movement of capital as a Treaty freedom. Today, Article 63 of the TFEU prohibits all restrictions on the movement of capital and payments between Member States, as well as between Member States and third countries.

What is the rationale behind the freedom of movement of capital?

The aim of free movement of capital is to encourage economic growth by enabling capital to be invested efficiently and promote the use of the euro as an international currency. It underpins the single market and complements the other three freedoms. These are: Free movement of persons / workers.

What are the EU rules on free movement?

As EU citizens, all nationals of the Member States of the European Union have the right to move freely within the European Union and to enter and reside in any EU Member State. This right to freedom of movement is guaranteed by Article 21 of the Treaty on the Functioning of the EU (TFEU).

How does freedom of movement work?

The free movement of workers means that nationals of any member state of the European Union can take up an employment in another member state on the same conditions as the nationals of that particular member state. Freedom of movement for workers shall be secured within the Community.

What is the difference between capital inflows and capital outflows?

What are Capital Flows? Capital outflow generally results from economic uncertainty in a country, whereas large amounts of capital inflow indicate a growing economy.

What causes capital outflow?

Capital outflow exerts pressure on macroeconomic dimensions within a nation and discouraging both foreign and domestic investment. Reasons for capital flight include political unrest, introduction of restrictive market policies, threats to property ownership and low domestic interest rates.

What are the EU rules on freedom of movement?

The free movement of workers means that nationals of any member state of the European Union can take up an employment in another member state on the same conditions as the nationals of that particular member state. In particular, no discrimination based on nationality is allowed.

Which ground Cannot justify a restriction on the free movement of capital?

The ECJ has repeatedly held that the free movement of capital may be limited by national legislation only if it is justified by one of the reasons mentioned in Article 65 or by overriding reasons in the public interest. Grounds of a purely economic nature cannot constitute such an overriding reason.

What is an example of freedom of movement?

Limit the ability of a person to choose where to live in the ACT; • Restrict the movement of people as part of the criminal process, for example, the imposition of bail conditions; • Allow for an intervention order against a person, or enables their detention; • Propose surveillance of an individual; • Empower public …

Is free movement of workers good?

Free movement of labour is generally considered to have worked quite well when the EU was composed of 12-15 Western European economies with similar income levels. Free movement of labour gives increased opportunities to workers and makes labour markets more flexible.

Which is an example of the free movement of capital?

other operations with financial institutions, including personal capital operations such as dowries, legacies, endowments, etc. Amongst the fundamental freedoms that underpin the EU single market (free movement of people, goods, services and capital), the free movement of capital is the most recent.

How does the free movement of capital work in the EU?

Legal framework. Article 63 of the treaty on the functioning of the EU prohibits all restrictions on capital movements and payments not only within the EU, but also between EU countries and countries outside the EU. However, further provisions in the treaty stipulate a number of exceptions to the principle of free movement of capital,…

Is the free movement of capital a treaty?

The Maastricht Treaty introduced the free movement of capital as a Treaty freedom. Today, Article 63 TFEU prohibits all restrictions on the movement of capital and payments between Member States, as well as between Member States and third countries.

When did capital controls end in the Republic of Cyprus?

Republic of Cyprus (2013–2015) Cyprus, a Eurozone member state which is closely linked to Greece, imposed the Eurozone’s first temporary capital controls in 2013 as part of its response to its 2012 banking crisis. These capital controls were lifted in 2015, with the last controls being removed in April 2015.