Commission considers legal action on Italian banking fiascos[en] 

At a press conference on 8 November, Mr McCreevy revealed that the Commission legal service is considering whether action could be taken against Italy for contravening EU rules on the free movement of capital and freedom of establishment. McCreevy also revealed that he personally would be in favour of such action.

In June and July 2005, much newsprint was expended on a row over whether the governor of the bank of Italy had improperly intervened to block the attempted takeover of an Italian bank by a foreign bidder. At the time, Commissioner McCreevy wrote to Mr Fazio asking for explanations of his position which appeared to be contrary to EU rules on a free and non-discriminatory single market for financial services. (see EurActiv 4 May 2005).

Mr McCreevy’s statements came on the day that the Commission issued a communication reiterating the import of the treaty obligations of free movement of capital. The document spells out that, in the financial services sector, no member state rules may limit capital movements (such as takeovers and mergers) on the grounds of nationality.

These developments may signal a sterner attitude from the Commission on the enforcement of single market principles in the financial sector.