Free movement of capital in the context of the implementation of monetary policy in EMU and the European Union

AuthorMajlindaTafaj Ilirjana Kucana
PositionUniversity of Tirana, Albania - Mediterranean University, Albania
IIPCCL Publishing, Tirana-Albania
Academic Journal of Business, Administration, Law and Social Sciences Vol. 1 No. 3
November 2015
ISSN 2410-3918
Acces online at
Free movement of capital in the context of the implementation of monetary
policy in EMU and the European Union
PhD (C.)MajlindaTafaj
University of Tirana, Albania
Ilirjana Kucana
Mediterranean University, Albania
Free movement of capital has been one of the main objectives of Article 3 of the EC Treaty, as
part of the development of the common market. Nowadays, the domestic market and almost all
of other freedoms (eg. workers, goods and services) depends on the freedom of movement of
capital. Unlike other freedoms, freedom of movement is more liberalized. European investment,
cross-border transfers, bank accounts, purchases and authorization of purchases of real estate,
inheritance etc., are included in the free movement of capital. Free movement of capital has lost
somehow its sense with the entry into force of EMU and the introduction of the Euro.
This liberalization aimed at realizing a collaboration and coordination of economic policies
and to some extent even political at the higher levels of the central banks where the fulfillment
of the convergence criteria (four criteria), was a prerequisite for a country to adopt the single
currency. But EMU and its implementation in the third phase brought significant consequences
with regard to the institutional, economic and monetary policy having an impact directly on
the free movement of capital in the EU, which will be the object of analysis in this paper.
Keywords: Free movement of capital, Euro, monetary liberalization, the Economic Monetary
Union, the European Court of Justice.
The principle of free movement of capital had been established in the Treaty of Rome.
This was a principle that would take matters in subsequent periods by returning to
the fourth most important basic freedom. The creation of the common market and
furthermore of a European single market, can not be conceived without the fulfillment
of a fundamental freedom such as that of circulating capital. This is one of the
fundamental freedoms of its four operating a joint union like the European Union;
furthermore it is directly related to the realization of Economic and Monetary Union.
European dream can not be complete if the free movement of capital is not liberalized
among other freedoms (eg. persons, goods and services). It would be impossible to
carry out those freedoms without the possible transfer from one member state to
another of workers payments, the prices of goods and services, investments and cross-
border transfers (Cyril, 2010, 217).
The Treaty of Rome had not sanctioned any formal obligation to liberalize capital
movements. Article 67 of the treaty is about determination of the measures necessary
for the normal functioning of the internal market. The following years did not bring any

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