Opinion of the Advocate General — ECLI:EU:C:1996:481
Date: 1996-12-10
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: France

Summary of the Judgment
1. Freedom to provide services — Credit institutions — Liberalization of banking services in
step with the progressive liberalization of movement of capital — Grant of mortgage loans —
Liberalization subject to the derogations provided for under the First Council Directive for
the implementation of Article 67 of the Treaty — Consequences
(EC Treaty, Arts 59 and 61(2); Council Directive of 11 May I960, as amended by Council
Directive 63/21, Art. 3 and Annex I, List C)
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SUMMARY — CASE C-222/95
2. Freedom to provide services — Credit institutions — Authorization requirement — Credit
institution already authorized in another Member State — Whether permissible — Condi­
tions
(EC Treaty, Art. 59; Council Directives 77/780 and 89/646)
3. Freedom to provide services — Restrictions — Requirement that persons providing services
have a permanent establishment — Not lawful
(EC Treaty, Art. 59)
1. The transaction which consists, for a
bank established in a Member State, in
granting a mortgage loan to a borrower
established in another Member State is a
provision of services connected with
movement of capital, the liberalization of
which, in accordance with Article 61(2) of
the Treaty, is to be effected in step with
the progressive liberalization of move­
ment of capital. At the period when the
First Council Directive for the implemen­
tation of Article 67 of the Treaty, as
amended by Second Directive 63/21, was
in force, the granting of such a mortgage
loan constituted a capital movement
which was in principle liberalized by
Article 3(1) of the first directive. It fol­
lows that, without prejudice to the
exchange restrictions which a Member
State could maintain or reintroduce pur­
suant to Article 3(2) of that directive, the
rules on capital movements were not of
such a kind as to restrict the freedom to
conclude mortgage loan contracts in the
form of provision of services under
Article 59 of the Treaty.
2. With regard to the period preceding the
entry into force of Second Directive
89/646 on the coordination of laws, regu­
lations and administrative provisions
relating to the taking up and pursuit of
the business of credit institutions, Article
59 of the Treaty must be construed as
precluding a Member State from requir­
ing a credit institution already authorized
in another Member State to obtain an
authorization in order to be able to grant
a mortgage loan to a person resident
within its territory, unless that authoriza­
tion
— is required of every person or com­
pany pursuing such an activity within
the territory of the Member State of
destination;
— is justified on grounds of public inter­
est, such as consumer protection; and
— is objectively necessary to ensure
compliance with the rules applicable
in the sector under consideration and
to protect the interests which those
rules are intended to safeguard, and
the same result cannot be achieved by
less restrictive rules.
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PARODI v BANQUE H. ALBERT DE BARY
In its assessment, the national court must,
in particular, draw a distinction according
to the nature of the banking activity in
question and the risk incurred by the per­
son for whom the service is intended.
Thus, the conclusion of a contract for a
mortgage loan presents the consumer
with risks that differ from those associ­
ated with the lodging of funds with a
credit institution. Furthermore, the need
to protect the borrower will vary accord­
ing to the nature of the mortgage loans,
and there may be cases where, precisely
because of the nature of the loan granted
and the status of the borrower, there is no
need to protect the latter by the applica­
tion of the mandatory rules of his
national law.
3. If the requirement of authorization con­
stitutes a restriction on the freedom to
provide services, the requirement of a
permanent establishment is the very nega­
tion of that freedom. It has the result of
depriving Article 59 of the Treaty of all
effectiveness, a provision whose very pur­
pose is to abolish restrictions on the free­
dom to provide services of persons who
are not established in the State in which
the service is to be provided. In order for
such a requirement to be acceptable, it
must constitute a condition which is
indispensable for attaining the objective
pursued.
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