ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)636
Vol.1980/0203

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COM(80)636final
th_.
COMMISSION -- Brussels,29October1980
OFTHE
EUROPEAN COMMUNITIES FOROFFICIAL USEONLY
GeneralSecretariat
NEGOTIATIONS FORTHEACCESSION
OPSPAINTOTHECOMMUNITY
CAPITALMOVEMENTS
Commission Communication totheCouncil
C0M(80)636final

IUTRODUCTIOlf\
1.AtthefirstmeetingoftheConferenceatMinisteriallevelbetween
theEuropeanCommunities andSpain,whichtookplaceinBrusselson
5February1979»Spainendorsedtheprincipleofacceptanceofthe
accrniscommunautaire^andagreedthatanyproblemsofadaptationwould
bedealtwithbytransitional measuresandtemporaryderogationsrather
thanbymodification oftheacquis.
2.Atthe3rdmeetingoftheConferenceatMinisteriallevel,whichtook
placeinBrusselson18December1979»theCommunitypresentedtoSpain
2'itspositiononcapitalmovements.
Ί
Spainpresenteditspositiononthischapteratthe4thmeetingofthe
ConferenceatDeputylevel,heldinBrusselson1February1980.
3.Inthelightoftheinformationavailabletoit,theCommissionis
nowabletosubmitproposalstotheCouncil.However,theCommission
judgesitprematuretomakeariyproposalsonthedurationofthetransitional
measuresortemporaryderogations whichitisadvocatinginprinciple.
^CONP-E/27/7
COKF-E/3/801CONF-E/6/79
^CONF-E/27/7'79basedonCommissionstaffpaperT/TAS-6/79

I.SUMMARYOPTHEACQUISCOMMUNAUTAIRE
FreedomofcapitalmovementsisoneofthepillarsoftheCommunity,
embodiedintheTreatyestablishing theEuropeanEconomicCommunity.
TheprinciplesonwhichthisfreedomisbasedaresetoutinArticle67,
whichprovidesthat,duringthetransitional periodandtotheextent
necessarytoensuretheproperfunctioningofthecommonmarket,Member
Statesshallprogressively abolishbetweenthemselvesallrestrictions
onthemovementofcapitalbelongingtopersonsresidentintheMember
•Statesandanydiscrimination basedonthenationality orontheplaceof
residenceofthe'partiesorontheplacewheresuchcapitalisinvested.
1PursuanttoArticle69oftheEECTreaty,aninitialCouncilDirective
wasadoptedon11May196O"fortheimplementation ofArticle67ofthe,
Treaty".ThisDirectivewasupdatedandamendedbyasecondCouncil
2Directivedated18December1962.,
1 .
Thesetwodirectivessetouttheconditionsforimplementation ofthe
Treaty,establishingfourlistsofcapitalmovements,eachstipulating
aspecificdegreeofliberalization forthe'capitalmovementstowhich
itrelates.
I • .
ListA
Th6MemberStatesgrantalltheforeignexchangeauthorizations required
fortheconclusionorperformance oftransactions orfortransfersbetween
residentsofMemberStates.Suchauthorization isthereforeautomatic.
I
• '
ListB
MemberStatesgrantgeneralpermissionfortheconclusionorperformance
oftransactions andfortransfersbetweenresidentsofMemberStates.-
LOJHo921/60,12.7.1960.^OJNo62/63,22.1.1963.

-2-
Thecapitalmovementsspecifiedinthislistrelatetocertaintypesof
operationsinsecurities.
ListC
ThecapitalmovementsspecifiedinListCareliberalizedconditionally ,
i.e.aMemberStatemaymaintainorreintroduce exchangerestrictions on
suchcapitalmovementsprovidedthoserestrictions existedwhenthe
directiveenteredintoforce(oratthetimeofaccession,inthecase
oftheUnitedKingdom,IrelandorDenmark),whereliberalizingthese
capitalmovementswouldhindertheachievement ofthatMemberState's
economicpolicygoals.
Denmark,Prance,Ireland,Italy,theNetherlands andtheUnitedKingdom
havemadeuseofthisfacility.However,theUnitedKingdomabolished
exchangerestrictions intheautumnof1979*
ListD
Thislistisconcernedinteraliawithshort-termcapitalmovementswhich
arenotcoveredbyariyCommunityundertaking onliberalization .
***
Forthepurposeofthenegotiations onSpain'saccession,attentionhas
beenconfinedtoListsAandB,whichplacespecificobligations onthe
MemberStates.
II.CMERALREMARKS
Spainhasrequestedtemporaryderogations,foranunspecifiedduration,on
fourtypesofcapitalmovement:

(i)Acquisition "byresidentsinSpainofforeignsecuritiesdealtinona
stockexchange,apartfromsecuritiesissuedbytheEuropeanCommunities
ortheEuropeanInvestment Bank.
(ii)IrrectinvestmentsofSpanishcapitalintheundertakings ofthe
MemberStateswithaviewtotheacquisition andownershipof
securitiesortheacquisition ,possessionandexploitation of
immovableproperty.
(iii)InvestmentsinrealestateintheMemberStates,madebyresidentsin
Spain,wheresuchinvestments sirenotconnectedwithemigrationin
thecontextoffreedomofmovementforworkersandtherightof
establishment .
(iv)Investmentsbynon-residents inSpaininalimitednumberofeconomic
sectorstobedefinedatalaterstateinthenegotiations .
Asregardsthefourthoftheserequests,whichconcerns .directinvestment
byresidentsoftheMemberStatesoftheCommunity,Commissionofficials
haveinformedtheMemberStatesthatthisrequestforaderogationdoes
notfallwithinthechapteroncapitalmovementsbutshouldbedealtwith
aspartofthechapteronrightofestablishment .Accordingly ,the
Communityreferredtothismatterinitsstatementontherightof
2establishment ,presentedatthe5*hmeetingatMinisterial Levelon
21July1980.
TheCommission'sremarksherearethereforesolelyconcernedwiththe
firstthreerequestsinthestatementbytheSpanishdelegation ,which
confirmedintheGeneralPointssetoutinitsstatementoncapital
movementsthatitacceptedtheacquiscommunautaire subjecttoany
proceduresandderogations whichmightbeagreed.
TheCommissionthereforeunderstandsthatthecapitalmovementsspecifiedin
ListsAandBoftheDirectiveof11MayI960,asupdatedandamendedby
T/TAS24/80–OralstatementbyaCommissionrepresentative concerningthe
capitalmovementschapter.
CONF-E42/80.

-4-
theDirective of18December 1962 ,andnotincluded ,intherequests for
derogations presented "bytheSpanish delegation ,will beliberalized
from thetime ofaccession .This means that direct investment inSpain
byCommunity residents will beauthorized automatically pursuant to
Article 1oftheDirective of11May 196,0 .
III .COMMISSION PROPOSALS
(l)Background totheSpanish requests
ItisnottheCommission 'sintention here togive ananalysis ofSpain 's
economic situation ,and ithastherefore confined itself tosetting out
anumber ofremarks onthecontext inwhich thetransactions covered by
the "Spanish requests should beconsidered .
Over thenext fewyears ,Spain 'seconomy will need agreat deal intheway
ofinvestment .This isthe result ofanumber offactors .
Firstly ,Spain 'slevel ofeconomic development places itamong the least -
advanced Community countries ,but ithasconsiderable growth potential ,
which should beused intheinterests ofconvergence with theCommunity .
TheSpanish economy isgoing through aperiod ofadjustment ,incommon ,
with alltheindustrialized countries ,which calls forahigh level of
investment .This isparticularly important inthe fie-ld ofenergy :Spain
isoneofthefewcountries ofWestern Europe where consumption perunit
ofGDPhasrisen since 1974 *Spain 'senergy plan isaimed atreversing
this trend bymeans ofasounder pricing policy andalso large-scale investments ,
particularly inthenuclear sector ,atanestimated cost of ofGUP ,
toreduce Spain 'sdependence onforeign sources ofenergy . ,

-5-
a
Aftermanyyearsofprotectionism ,Spainalsohastoadapttothenew
conditionsofcompetition ontheworldmarket.Thiswillinvolvea
bigincreaseinproductivityinmanysectors,andexpensiverestructuring .
ThesteadyriseinSpam'sunemployment figuresalsocallsforaflat-out
efforttoachievearateofactivityadequatetocopewiththiscrucial
problem.Thisisthefirstaimofthemedium-term programmeadoptedin
August1979»andthecornerstoneoftheeconomicplanpresentedbythe
Suarezgovernmenton16September.
Since1975therehasbeenamarkedfallinthelevelofinvestment and
savingsinSpaininbothabsoluteandrelativeterms.Therateofinvestment
declinedfrom25«1$ofGDPin1975"tounder20%in1979tafigurewhich
putsSpainnearthebottomoftheCommunityleague.
Inthesecircumstances theSpanishauthorities havetakenstepstoimprove
theinvestmentclimate,mobilizedomesticsavingsandstrikeabetter
balancebetweenthetwoaggregates.
I
Apartfromtheeconomicpolicymeasuresdesignedtosupporttheadjustment
process,inordertorestoreaclimateofconfidencebyenablingfirmsto
I
builduptheirself-financing Capacityagain,variousstructuralmeasures
havebeenadoptedtoencouragesavingandimprovetheoperationoffinancing
channelsalongmoreliberallines.

-6-
Thelatter arechiefly concerned with thefinancial institutions ,
which should beallowed tocompete more directly among themselves ,and
stock exchanges .
(2)Commission proposals
Inadifficult economic climate ,Spain 'seconomy ismoving towards a
greater degree ofliberalization .Major steps were taken attheend
of1979 toencourage theliberalization ofSpanish investment abroad ,
andmore liberal rules were adopted forcurrent payments .
On -thefirst ofthese twopoints thefundamental aimofliberalization ,
despite the fact that theSpanish authorities have theright topostpone
aplanned investment abroad ifitwould result ininjury totheeconomy ,
istoenable Spanish firms ,setting aside cyclical -constraints ,toexpand
ontheworld market ,andtheresult ofsuch development should inthe
medium andlong term betoboost thevolume ofexports andincrease revenue
tohelp balance payment ^oncurrent account .
This package ofmeasures isamajor step forSpain towards adoption ofthe
acquis communa.utaire regarding capital movements.' ,
Intheshort term ,they represent asacrifice forSpain 'sbalance ofpayments ,
because :
(i)after twoyears insurplus (1978 and1979 )Spain 'scurrent payments
balance will probably runupadeficit oftheorder offa000million
in1980 ; '■ ' "
(ii)sofarSpain hasalways been anetimporter ofcapital ,which has

-7-
enablediteithertooffsetortoreducetheimpactofsucha
deficit.However,withitslargereservestheSpanisheconomy -
hasamarginformanoeuvrewhichshouldbeoverlooked#
TheCommissionnotesingeneralthatSpainisproposingtoliberalizecapital
movementswiththeCommunitymuchmorefullyfromthetimeofaccession,so
thatregulationsinthisfieldwillnotconstituteasignificantobstacle
toimplementation ofthefreedomsforwhichtheEECTreatyprovides. 1
WithregardtoSpain'srequests,theCommissionisnowabletoputthe
followingproposals.However,itfeelsthatitwouldbeprematureatthis
stageofthenegotiations ,andgiventheSpanishauthorities' effortsto
liberalizethecountry'srules,toexpressanopiniononthedurationof
,anytransitional measuresortemporaryderogations .
A.Acquisition byresidentsofforeignsecuritiesdealtinonastock
exchangeapartfromsecuritiesissued_bytheEuropeanCommunitiesor
theEuropeanInvestment Bank
7,
Theroyaldecreedated14December1979allowsSpanishinvestorstosubscribe
fororacquirefixed-interest securitiesdenominatedinaforeigncurrency
andissuedbySpanishpublicorprivatelegalpersons'orbyinternational
organizations ofwhichSpainisamember.Thustheundertakingtoliberalize
suchsecuritiesismerelyanapplication toaspecificcase-theCommunities
andtheEI3-oftheSpanishrulesalreadyinforce.
TheCommissionnotesthatthederogationrequestedbytheSpanishdelegation
coverstransactions alreadypartlyliberalized pursuanttotherulescurrently

-8-
applyingtocertainclassesofresidentsinSpain,aspriorpermission
fromtheSpanishauthoritiesforoperationsinsecuritiesmustbe
obtained ,byresidentsinSpainotherthan:
•V
(a)insurancecompanies,depositbanksandindustrialbanks,which
arefreetobuyforeignsecuritiesuptoavalueof10%ofthe
increaseintheirownfundsfromthedateofpublication ofthe
«14SeptemberdecreeintheOfficialGazette; -.<.
(b)investmentfundsandinvestmentcompanies,whicharefreetobuy
securitieswithinthelimitsandintheformslaiddowninthe
legislation whichgovernsthem. '
ι^ 'ί' - ■
i
4
iInthelightofthedomesticobjectivesoftheSpanisheconomyregarding
savingsandinvestmentandtheneedtoliberalizesuchoperationsgradually
toavoidspeculative movementswhichcouldcauseproblemsfordomestic
financingchannelsandthebalanceofpayments,theCommissionproposes
acceptanceoftheprincipleoftemporaryderogation.
However,theCommissionconsidersthatthecurrentrulesonoperations
insecuritiesbyinsurancecompanies,depositbanks,industrialbanks,and
investmentfundsandcompaniesmustcontinueastheyare.
B.InvestmentsinrealestateintheMemberStates,madebyresidentsin
Spain,wheresuchinvestments -arenotconnectedwithemigrationinthe
contextoffreedomofmovementforworkersandtherijhtofestablishment
"TheCommissionnotesthatthisrequestbySpaindoesnotconstitutean
obstacletotheexerciseofrightsresultingfromtherightofestablishment

-9-
and.thefreemovementofemployedandself-employed persons.
Forthatreason,andinthelightoftheforegoingconsiderations ,the
Commissionproposesthattheprincipleofatemporaryderogationin
respectoftheoperationstowhichSpain'srequestrefersbeaccepted.
C.Directinvestments ofSpanishcapitalintheundertakings ofthe
MemberStateswithaviewtotheacquisition andownershipofsecurities
ortheacquisition^possessionand_exploitation of_immovableproperty
Thisisaspecificandlimitedrequestdesignedtosupplementthecontrol
mechanismsrequestedbytheSpanishdelegationunderpointsAandB.
Inviewofitspositiononthosetwopoints,theCommissionproposesthat
theprincipleofatemporaryderogation beacceptedinrespec.tofthese
operations onthesamelinesasinthecaseoftheoperationscoveredby
pointsAandB.