COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(92) 545 final 
Brussels, 10 December 1992 
Proposal for a 
COUNCIL DIRECTIVE 
authorizing The Hellenic Republic 
to defer liberalization of certain capital movements 
under Article 6(2) of Council Directive 88/361/EEC of 24 June 1988 
(presented by the Commission) 
z 
EXPLANATORY MEMORANDUM 
1. The Council Directive 88/361/EEC of 24 June 1988 which entered into 
force on 1 July 1990, authorized four Member States - Greece, Ireland, 
Spain and Portugal - to defer the liberalization of certain capital 
transactions until 31.12.1992. 
Moreover, under Article 6 paragraph 2 of the Directive, Greece and 
Portugal may request an extension of the above time limit if they 
consider that they are unable, because of balance of payments 
difficulties or of Insufficient adaptation of the national financial 
system to proceed with full liberalization before 31.12.1992. The 
possibility for such an extension, which cannot exceed three years, is 
also covered by Article 73e of the EMU Treaty. 
2. The Greek authorities requested on 12.11.92 an extension of the 
transitional period for short-term capital operations until 1.1.1995. 
They also propose to liberalize some of the currently applied 
restrictions from 1.1.1993. 
According to the authorities the maintenance of the restrictions on 
short-term capital movements, for a specified period, is necessary while 
efforts to stabilize the economy are still underway and in order to 
support the monetary and exchange rate policies. 
3. The Commission, after having reviewed, in collaboration with the 
Monetary Committee, the economic and financial situation of Greece, 
considers that there are grounds for granting an extension of the 
transitional period : 
although the balance of payments has improved following progress made 
towards stabilizing the economy, trHs improvement remains fragile 
taking account of the stil! sizeable fiscal imbalances and the high 
InfI at Ion; 
although liberalization measures and reforms have been introduced in 
4 he area of financial markets, key markets and Instruments are still 
Insufficiently developed. 
In view of the above, the Commission proposes to the Council to adopt 
the attached Directive authorizing Greece to defer the liberalization of 
certain capital movements until 30 June 1994. 
Proposal for a 
COUNCIL DIRECTIVE 
of .. December 1992 
authorizing The Hellenic Republic 
to defer liberalization of certain capital movements 
under Article 6(2) of Council Directive 88/361/EEC of 24 June 1988 
THE COUNCIL OF THE EUROPEAN COMMUNITIES 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 69 thereof, 
Having regard to the Council Directive 88/361/EEC^1> issued for the 
implementation of the provisions of Article 67 of the Treaty and in 
particular Article 6(2) thereof, 
Having regard to the proposal from the Commission submitted following 
consultation with the Monetary Committee^2^. 
Whereas under Article 6(2) of the Directive the Hellenic Republic was 
authorized to continue to apply, until 31 December 1992, restrictions 
on the movement of capital laid down in Annex IV, Lists III and IV, of 
the Directive; whereas the Article provides for the possibility for an 
extension of this time limit, not exceeding three years. 
Whereas the Hellenic Republic has applied a programme of economic 
stabilisation and reform; whereas It has claimed that the process of 
budgetary consolidation has accelerated and it will be strengthened 
with the 1993 budget; whereas despite the adjustment effort which is 
underway solid expectations of monetary and exchange rate stability 
have not, yet, been established; whereas the maintenance of 
restrictions on short-term capital, for a specified period, is 
necessary in order to ensure a smooth macroeconomic adjustment and to 
support monetary and exchange rate policies after the entry of the 
Drachma to the exchange rate mechanism of the EMS-, whereas the Hellenic 
Republic has requested an extension of the time limit set for complete 
liberalization of short-term capital until 1.1.1995-, whereas it 
intends, however, to proceed to the liberalization, from 1.1.1993, of 
some of the currently applied restrictions. *- J 
(1) O.J. No L 178, 8.7.1988, p.5 
(2) 
f 
Whereas the Commission has reviewed, in collaboration with the Monetary 
Committee, the economic and financial developments in the Greek 
economy; whereas it follows from this examination that although 
progress has been made in the stabilisation of the economy and the 
situation of the balance of payments has improved, the existing 
sizeable budgetary imbalances and the still high inflation render this 
improvement fragile. Whereas a gradual liberalization of short-term 
capital movements is appropriate before a durable improvement in the 
stabilization of the economy has been achieved. 
Whereas reforms have been introduced and liberalization measures have 
been taken by the Greek authorities in the area of financial markets; 
whereas, however, the financial system is not yet sufficiently 
developed to face a situation of complete mobility of capital. 
Whereas there are grounds, In view of the above, for extending the 
authorization to apply restrictions on the movement of short-term 
capi tal. 
Whereas however such a derogation can in no way justify a control of 
capital movements under conditions contrary to Article 8A of the 
Treaty. 
HAS ADOPTED THIS DIRECTIVE 
Article 1 
The Hellenic Republic may temporarily continue to apply restrictions to 
the capital movements listed in the Annex to this directive, subject to 
the conditions and time limits laid down in that Annex. 
Article 2 
This Directive is addressed to the Member States 
Done at Brussels, .. December 1992 
For the CounciI 
ANNEX 
The Hellenic Republic may, until 30 June 1994, 
continue to apply restrictions on the following capital movements 
Operations in current and deposit accounts with financial institutions: 
operations of a duration of less than one year carried out by 
residents with foreign financial institutions. 
Financial loans and credits of a duration of less than one year 
Personal capital movements : 
loans of a duration of less than one year. 
Physical import and export of financial assets : 
means of payments. 

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ISSN 0254-1475 
COM (92) 545 final 
DOCUMENTS 
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Catalogue number : CB-CO-92-567-EN-C 
ISBN 92-77-50636-9 
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