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European Commission - Press release

Free movement of capital: Commission refers Italy to the Court of Justice on investment restrictions in privatised companies

Brussels, 24 November 2011 - The European Commission has decided to refer Italy to the Court of Justice of the European Union because it considers that certain provisions of Italian law which grants the Italian State special powers in privatised companies operating in strategic sectors, such as telecommunications and energy, constitute unjustified restrictions on the free movement of capital and the right of establishment (Articles 63 and 49 TFEU). One or more of these special powers have been introduced in the statutes of ENEL, ENI, Telecom Italia and Finmeccanica.

Italian legislation provides that the State may be granted special powers to safeguard its vital interests should they be under threat. First, the Italian State has the power to oppose both acquisitions of shares and the conclusion of pacts by shareholders representing a certain proportion of voting rights (5% or a lower percentage if so established). Second, the State can also veto certain company decisions, such as a merger or a company split.

The Commission considers that such powers make direct and portfolio investment less attractive and may discourage potential investors in other Member States from buying shares in the companies concerned.

Latest contacts with the Italian authorities suggest that compliance can be envisaged in the very short term. Therefore, the European Commission has decided to postpone by one month the execution of this referral.


Member States may justify such measures under strict conditions as defined in the EU Treaty and clarified by the Court’s case-law. In this case, however, the Commission considers that the restrictions on acquisitions and shareholders' pacts at issue here are inadequate to protect the objective of safeguarding the vital interest of the State. Moreover, the criteria to exercise the special powers are not sufficiently precise and could result in an excessive discretion of the State. Thus, in the Commission's view, these special rights are unjustified restrictions on the free movement of capital (Article 63 of the Treaty on the Functioning of the EU - TFEU) and the right of establishment (Article 49 TFEU).

What is the aim of the EU rules in question?

Free movement of capital is at the heart of the Single Market and constitutes one of its "four freedoms". It allows for more open, integrated, competitive and efficient markets and services in Europe. For citizens, it means the ability to undertake a range of operations abroad, such as opening a bank account, buying shares in non-domestic companies, or purchasing real estate. For companies, it means the ability to invest in and own companies in other European countries, and allows them the option to play an active role in the management of those companies.

More information:

Free movement of capital

Latest information on infringement proceedings concerning all Member States

For more information on infringement procedures, see MEMO/11/824

Contacts :

Chantal Hughes (+32 2 296 44 50)

Carmel Dunne (+32 2 299 88 94)

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