Alphabetical index
This page is available in 4 languages

We are migrating the content of this website during the first semester of 2014 into the new EUR-Lex web-portal. We apologise if some content is out of date before the migration. We will publish all updates and corrections in the new version of the portal.

Do you have any questions? Contact us.

Achieving the free circulation of capital

The Single European Act, which placed the free movement of capital on the same footing as that of goods and services, was a decisive step forward for the free movement of capital. It led to the adoption on 24 June 1988 of Directive 88/361/EEC, which is designed to give the single market its full financial dimension. The directive implements Article 67 of the Treaty establishing the European Communities.


Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty.


The directive enshrines the principle of full liberalisation of capital movements between Member States with effect from 1 July 1990. Up until 31 December 1992, transitional arrangements were offered for Spain, Greece, Ireland and Portugal. Portugal and Greece were given the possibility of an extension which was granted for a maximum of three years.

The Commission seeks to abolish the general arrangements for restrictions on movements of capital between persons resident in Member States. "Capital movements" are understood to be all the operations necessary for the purposes of capital movements carried out by a natural or legal person. This includes direct investments, investments in real estate, operations in securities and in current and deposit accounts, and financial loans and credits.

The directive does nonetheless make provision for a "safeguard clause". Capital movements can impose a very severe strain on foreign-exchange markets, which leads to serious disturbances in the conduct of a Member State's monetary and exchange rate policies. In this case, the Commission, after consulting the Monetary Committee and the Committee of Governors of the Central Banks, may authorise that Member State to take protective measures. The protective measures relate to the capital movements listed in Annex II of the directive, and shall not exceed six months.

With effect as of 1 July 1990, the Directive repeals:

  • the first Directive for the implementation of Article 67 of the Treaty
  • Council Directive 72/156/EEC of 21 March 1972 on regulating international capital flows and neutralising their undesirable effects on domestic liquidity.


ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Directive 88/361/EEC07.07.198801.07.1990OJ L 178 of 08.07.1988
Last updated: 03.07.2007
Legal notice | About this site | Search | Contact | Top