The European Commission approved Greece’s imposition of capital controls on Monday, saying Athens was justified in temporarily breaching European Union laws on free capital movement in order to protect its banks.“As guardian of the Treaties and with a view to safeguarding the integrity of the single market,
the Commission has made an immediate, preliminary assessment of the Greek measures that introduce the controls and finds them to be, prima facie, justified,” Financial Services Commissioner Jonathan Hill said.
“In the current circumstances, the stability of the financial and banking system in Greece constitutes a matter of overriding public interest and public policy that would appear to justify the imposition of temporary restrictions on capital flows. Maintaining financial stability is the main and immediate challenge for the country,” Hill further said.
The EU could have raised legal objections to the sudden measure that was imposed overnight as Greece faces a default on its debt payments.
However, free movement of capital should be reinstated as soon as possible. “While the imposed restrictive measures appear necessary and proportionate at this time, the free movement of capital will however need to be reinstated as soon as possible in the interest of the Greek economy, the Eurozone, and the European Union’s single market as a whole,” the EC statement added.
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