Towards the Full Liberalization of Capital Movements

Abstract

It had taken a long time to reach agreement on the 1986 directive. From the initial call in the Monetary Committee in mid—1982 for a resumption of the liberalization process to the entry into force of the directive in February 1987, nearly five years had been needed for reaching agreement on an enlargement of the liberalization obligations. Yet, these were not wasted years. The lengthy discussions were needed to bring about a change in official thinking, both among the officials as well as among the politicians. Countries had been able to try out cautiously the effects of a gradual relaxation of domestic regulations and exchange controls. Helped by macro-economic policies directed towards price stability and budgetary discipline, these steps generally had been received well in the financial markets. Nonetheless, at times there was a flare-up of tensions in the markets, usually sparked by political interference with interest rates.

L’ouverture des frontières financières est une chance qu’il ne faut pas laisser passer, mais la construction du grand marché européen ne doit pas aboutir à mettre en panne l’Europe monétaire.

Edouard Balladur