June 17th 2013: Andrew Brons has received an answer to his Question for Written Answer to the European Commission on Capital controls.
"With reference to your answer to my Written Question E-011592/2011 of 8 December 2011 on capital flight, it is clear that recent events in Cyprus have justified the fears I anticipated in my question.
- 1. Does the Commission concur that it would be prudent for citizens in the ‘southern periphery’ of the eurozone to protect their savings from default on the part of their government and/or their bank and/or from a possible restoration of their nation’s currency (at a devalued rate) by moving their savings to safer havens? If not, why not?
- 2. Will the Commission rule out any further confiscation of savings of the kind recently carried out in Cyprus? If not, why not?
- 3. Will the Commission rule out any further capital control measures of the kind recently taken in Cyprus? If not, why not?
- 4. If the Commission will not rule out any further confiscation of savings and/or any further capital controls, will it therefore concur that it would be prudent for savers and depositors to take steps to seek out safe havens for their savings?"
The answer given by Mr Barnier on behalf of the Commission stated:
"A whole range of measures are in place or being negotiated which contribute to a consistent level of deposit protection throughout the internal market.
"For example, Directive 94/19/EC ensures that depositors are covered by deposit guarantee schemes up to a coverage level of EUR 100,000 in case of bank default. This guarantee has always been preserved for all depositors in the EU, including in Cyprus.
"The DGS system is complemented by Directive 97/9/EC on investor compensation schemes which offers protection with regard to securities. Measures have been proposed by the Commission to strengthen deposit guarantee schemes and investor compensation schemes and are awaiting the legislator’s final decision. In addition, the proposal on bank recovery and resolution made in June 2012 aims at ensuring convergence in regulatory and financial frameworks for bank crisis management in the whole EU. This will reinforce the establishment of a common level of financial safety throughout the internal market.
"While the imposition of capital control measures is an unprecedented measure, Article 65 TFEU allows such temporary restrictions to the free movement of capital. In the case of Cyprus, the Commission acknowledges that, taking into account the emergency situation and the significant risk of an uncontrollable outflow of deposits, temporary unilateral restrictions were justified in the overriding public interest in the given circumstances.
"A monitoring system is in place to ensure that the capital controls are not maintained longer than necessary."