- Within the framework of the provisions set out in this chapter, all restrictions on
payments between Member States and between Member States and third countries
shall be prohibited.
What this means in practice is illustrated by the Albore case.
Albore (CJEU Case C-423/98)
Two properties at Barano d’Ischia, in an area of Italy designated as being of military
importance, were purchased on 14 January 1998 by two German nationals, who did not
apply for prefectural authorization. In the absence of such authorization, the Naples
Registrar of Property refused to register the sale of the properties to foreigners.
Mr. Albore, the notary before whom the transaction was concluded, appealed against
that refusal to theTribunale Civile e Penale di Napoli, claiming that the sale at issue,
concluded for the benefit of nationals of a Member State of the Community, should not be
subject to the national legislation which required only foreigners to obtain prefectural
authorization.
According to the CJEU the notary was right in principle: without special reasons, this
discrimination between Italian nationals and nationals of other EU Member States was not
allowed.
As this example illustrates, the protection of the free movement of capital extends to the
protection of transactions in which the movement of capital is involved.
An important aspect of the free movement of capital is the introduction of the
euro and, more generally, the creation of the European Monetary Union (EMU). As
is well known, this has led to serious financial and political problems within the
EU. In the following sections, which aim to interpret the changes in Europe that are
connected to the EU, the development of the EMU plays a central role.
10.6 Limitation of Sovereignty
10.6.1 Introduction
One of the obstacles that hindered the creation of a single market was that Member
States of the EU had their own currencies. The United Kingdom had the English
pound, Germany the Deutschmark, France and Belgium each their own francs, Italy
its lira, Spain its peseta, etc. This would not have been problematic for trade had the
exchange rates between these currencies been stable—but that was not the case.
The value of the mark, for instance, tended to appreciate with regard to the other
currencies, and the value of the Italian lira tended to depreciate. For a business that
wants to trade, factors such as changes in exchange rates, uncertainty about their
size and time, and costs of exchange make it less attractive to trade with businesses
operating in countries with a different currency. In other words, the existence of
different currencies with unstable exchange rates was an obstacle for the internal
market. For this reason, the pursuit of an internal market spilled over into the pursuit
of monetary integration and—after a period of transition—to the introduction of the
euro as a common currency for an important group of EU members.
10 The Law of Europe 227