THE CAPITALIZATION OF EUROPE
Who would expect innovative financial deregulation to emerge from Europe's most notorious bureaucracy, the EEC Commission?
The corridors in the Berlayamont building, its Brussels headquarters, are the cradle of a system notorious for procrastination, compromise, and fudged opportunities. Yet from these corridors, in early June, came a proposal which could have far-reaching effects for the future of European economies.
The proposal was simple: why don't we scrap exchange controls between the member states on dealing in unlisted securities and in new share flotations? Article 67 of the Treaty of rome, the charter which created the EEC, declares that there should be no obstructions to the free flow of capital between the member countries, so the June proposal is simply an extension of existing European law. Nor it is binding: the proposals of the commission have to be ratified by the finance ministers from each member nation before they are formally adopted.
But it was nimble work by the bureaucrats in Brussels. Unlisted securities markets have only just gained credibility in Europe -- the first of them, Italy's mercato ristretto (restricted market) is only eight years old. So the plan to liberalize the market for cross-border trading in such instruments is, in Brussels terms, almost avant-garde.