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Brussels, 5th April 2001

Investment restrictions - Commission reaffirms its exclusive competence as guardian of Treaties

Following adoption by the European Parliament at its 5th April plenary session in Strasbourg of a Resolution on 'updating certain legal aspects concerning intra-EU investment', the European Commissioner for the Internal Market Frits Bolkestein commented "It was on the basis of its exclusive competence as guardian of the Treaties that the European Commission adopted a Communication in 1997 concerning cross-border investment within the EU. This Communication offers guidance to Member States and economic operators as to how the Commission interprets Treaty rules on free movement of capital and freedom of establishment as regards restrictions on intra-Community investment, in order to avoid divergent interpretations. The Communication states that nationals of other Member States should be free to acquire controlling stakes, exercise the voting rights attached to these stakes and manage domestic companies under the same conditions laid down in a Member State for its own nationals. The principles set out in the Communication are based on the Treaty and on the case law of the Court of Justice, which remains of course the sole competent institution to provide a definitive interpretation of Community law. Both the free movement of capital and freedom of establishment constitute fundamental and directly applicable freedoms established by the EC Treaty. The Court of Justice has consistently established in its case law that even Community institutions themselves are not entitled to restrict fundamental freedoms in other words, the Commission, Council of Ministers and Parliament are not allowed to decide to impose restrictions on these fundamental freedoms." Mr Bolkestein indicated to the Parliament's plenary session on 3rd April that the Commission intended to hold a debate shortly on intra-Community investment.

For further details of the 1997 Communication see IP/97/477 and EC Official Journal C 220 of 19 July 1997.

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