TREATY OF ROME
The Treaty of Rome, enacted in March 1957, established a European customs
union and required the elimination of all quantitative restrictions and
other measures having an equivalent effect on trade among the European
signatory member states. It was intended to create a single market with
free movement of goods, persons, services, and capital and envisioned a
single internal European market. It became the founding charter for the
European Economic Community, which came into being on January 1, 1958. The
Treaty had no provisions for monetary arrangements. Accomplishments
following the treaty included completion of the customs union and
establishment of the Common Agricultural Policy (CAP).
See: Maastricht Treaty.
TITLE III. FREE MOVEMENT OF PERSONS, SERVICES AND CAPITAL
CHAPTER 1. WORKERS
Article 48. 1. Freedom of movement for workers shall be secured within
the Community by the end of the transitional period at the latest.
2. Such freedom of movement shall entail the abolition of any
discrimination based on nationality between workers of the Member States
as regards employment, remuneration and other conditions of work and
employment.
3. It shall entail the right, subject to limitations justified on grounds
of public policy, public security or public health:
(a) to accept offers of employment actually made;
(b) to move freely within the territory of Member States for this
purpose;
(c) to stay in a Member State for the purpose of employment in
accordance with the provisions governing the employment of
nationals of that State laid down by law, regulation or
administrative action;
(d) to remain in the territory of a Member State after having been
employed in that State, subject to conditions which shall be
embodied in implementing regulations to be drawn up by the
Commission.
4. The provisions of this Article shall not apply to employment in the
public service.
Article 49. As soon as this Treaty enters into force, the Council shall,
acting in accordance with the procedure referred to in Article 189b and
after consulting the Economic and Social Committee, issue directives or
make regulations setting out the measures required to bring about, by
progressive stages, freedom of movement for workers, as defined in
Article 48, in particular:
(a) by ensuring close co-operation between national employment
services;
(b) by systematically and progressively abolishing those administrative
procedures and practices and those qualifying periods in respect of
eligibility for available employment, whether resulting from
national legislation or from agreements previously concluded
between Member States, the maintenance of which would form an
obstacle to liberalisation of the movement of workers;
(c) by systematically and progressively abolishing all such qualifying
periods and other restrictions provided for either under national
legislation or under agreements previously concluded between Member
States as impose on workers of other Member States conditions
regarding the free choice of employment other than those imposed on
workers of the State concerned;
(d) by setting up appropriate machinery to bring offers of employment
into touch with applications for employment and to facilitate the
achievement of a balance between supply and demand in the
employment market in such a way as to avoid serious threats to the
standard of living and level of employment in the various regions
and industries.
Article 50. Member States shall, within the framework of a joint
programme, encourage the exchange of young workers.
Article 51. The Council shall, acting unanimously on a proposal from the
Commission, adopt such measures in the field of social security as are
necessary to provide freedom of movement for workers; to this end, it
shall make arrangements to secure for migrant workers and their
dependants:
(a) aggregation, for the purpose of acquiring and retaining the right
to benefit and of calculating the amount of benefit, of all periods
taken into account under the laws of the several countries;
(b) payment of benefits to persons resident in the territories of
Member States.
CHAPTER 2. RIGHT OF ESTABLISHMENT
Article 52. Within the framework of the provisions set out below,
restrictions on the freedom of establishment of nationals of a Member
State in the territory of another Member State shall be abolished by
progressive stages in the course of the transitional period. Such
progressive abolition shall also apply to restrictions on the setting up
of agencies, branches, or subsidiaries by nationals of any Member State
established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue
activities as self-employed persons and to set up and manage
undertakings, in particular companies or firms within the meaning of the
second paragraph of Art. 58, under the conditions laid down for its own
nationals by the law of the country where such establishment is effected,
subject to the provisions of the Chapter relating to capital.
Article 53. Member States shall not introduce any new restrictions on the
right of establishment in their territories of nationals of other Member
States, save as otherwise provided in this Treaty.
Article 54. 1. Before the end of the first stage, the Council shall,
acting unanimously on a proposal from the Commission and after consulting
the Economic and Social Committee and the European Parliament, draw up a
general programme for the abolition of existing restrictions on freedom
of establishment within the Community. The Commission shall submit its
proposal to the Council during the first two years of the first stage.
The programme shall set out the general conditions under which freedom of
establishment is to be attained in the case of each type of activity and
in particular the stages by which it is to be attained.
2. In order to implement this general programme or, in the absence of
such programme, in order to achieve a stage in attaining freedom of
establishment as regards a particular activity, the Council, acting in
accordance with the procedure referred to in Article 189b and after
consulting the Economic and Social Committee, shall act by means of
directives.
3. The Council and the Commission shall carry out the duties devolving
upon them under the preceding provisions, in particular:
(a) by according, as a general rule, priority treatment to activities
where freedom of establishment makes a particularly valuable
contribution to the development of production and trade;
(b) by ensuring close co-operation between the competent authorities in
the Member States in order to ascertain the particular situation
within the Community of the various activities concerned;
(c) by abolishing those administrative procedures and practices,
whether resulting from national legislation or from agreements
previously concluded between Member States, the maintenance of
which would form an obstacle to freedom of establishment;
(d) by ensuring that workers of one Member State employed in the
territory of another Member State may remain in that territory for
the purpose of taking up activities therein as self-employed
persons, where they satisfy the conditions which they would be
required to satisfy if they were entering that State at the time
when they intended to take up such activities;
(e) by enabling a national of one Member State to acquire and use land
and buildings situated in the territory of another Member State, in
so far as this does not conflict with the principles laid down in
Art. 39 (2);
(f) by effecting the progressive abolition of restrictions on freedom
of establishment in every branch of activity under consideration,
both as regards the conditions for setting up agencies, branches or
subsidiaries in the territory of a Member State and as regards the
conditions governing the entry of personnel belonging to the main
establishment into managerial or supervisory posts in such
agencies, branches or subsidiaries;
(g) by co-ordinating to the necessary extent the safeguards which, for
the protection of the interests of members and others, are required
by Member States of companies or firms within the meaning of the
second paragraph of Art. 58 with a view to making such safeguards
equivalent throughout the Community;
(h) by satisfying themselves that the conditions of establishment are
not distorted by aids granted by Member States.
Article 55. The provisions of this Chapter shall not apply, so far as any
given Member State is concerned, to activities in which that State are
connected, even occasionally, with the exercise of official authority.
The Council may, acting by a qualified majority on a proposal from the
Commission, rule that the provisions of this Chapter shall not apply to
certain activities.
Article 56. 1. The provisions of this Chapter and measures taken in
pursuance thereof shall not prejudice the applicability of provisions
laid down by law, regulation or administrative action providing for
special treatment for foreign nationals on grounds of public policy,
public security or public health.
2. Before the end of the transitional period the Council shall, acting
unanimously on a proposal from the Commission and after consulting the
European Parliament, issue directives for the co-ordination of the above
mentioned provisions laid down by law, regulation or administrative
action. After the end of the second stage, however, the Council shall,
acting in accordance with the provisions referred to in Article 189b,
issue directives for the co-ordination of such provisions as, in each
Member State, are a matter for regulation or administrative action.
Article 57. 1. In order to make it easier for persons to take up and
pursue activities as self-employed persons, the Council shall, acting in
accordance with the procedure referred to in Article 189b, issue
directives for the mutual recognition of diplomas, certificates and other
evidence of formal qualifications.
2. For the same purpose, the Council shall, before the end of the
transitional period, issue directives for the co-ordination of the
provisions laid down by law, regulation or administrative action in
Member States concerning the taking up and pursuit of activities as
self-employed persons. The Council, acting unanimously on a proposal from
the Commission and after consulting the European Parliament, shall decide
on directives the implementation of which involves in at least one Member
State amendment of the existing principles laid down by law governing the
professions with respect to training and conditions of access for natural
persons. In other cases the Council shall act in accordance with the
procedure referred to in Article 189b.
3. In the case of the medical and allied and pharmaceutical professions,
the progressive abolition of restrictions shall be dependent upon
coordination of the conditions for their exercise in the various Member
States.
Article 58. Companies or firms formed in accordance with the law of a
Member State and having their registered office, central administration
or principal place of business within the Community shall, for the
purposes of this Chapter, be treated in the same way as natural persons
who are nationals of Member States.
'Companies or firms' means companies or firms constituted under civil or
commercial law, including co-operative societies, and other legal persons
governed by public or private law, save for those which are non-profit
making.
CHAPTER 3. SERVICES
Article 59. Within the framework of the provisions set out below,
restrictions on freedom to provide services within the Community shall be
progressively abolished during the transitional period in respect of
nationals of Member States who are established in a State of the
Community other than that of the person for whom the services are
intended.
The Council may, acting by a qualified majority on a proposal from the
Commission, extend the provisions of this Chapter to nationals of a third
country who provide services and who are established within the
Community.
Article 60. Services shall be considered to be 'services' within the
meaning of this Treaty where they are normally provided for remuneration,
in so far as they are not governed by the provisions relating to freedom
of movement for goods, capital and persons.
'Services' shall in particular include:
(a) activities of an industrial character;
(b) activities of a commercial character;
(c) activities of craftsmen;
(d) activities of the professions.
Without prejudice to the provisions of the Chapter relating to the right
of establishment, the person providing a service may, in order to do so,
temporarily pursue his activity in the State where the service is
provided, under the same conditions as are imposed by that State on its
own nationals.
Article 61. 1. Freedom to provide services in the field of transport
shall be governed by the provisions of the Title relating to transport.
2. The liberalisation of banking and insurance services connected with
movements of capital shall be effected in step with the progressive
liberalisation of movement of capital.
Article 62. Save as otherwise provided in this Treaty, Member States
shall not introduce any new restrictions on the freedom to provide
services which has in fact been attained at the date of the entry into
force of this Treaty.
Article 63. 1. Before the end of the first stage, the Council shall,
acting unanimously on a proposal from the Commission and after consulting
the Economic and Social Committee and the European Parliament, draw up a
general programme for the abolition of existing restrictions on freedom
to provide services within the Community. The Commission shall submit its
proposal to the Council during the first two years of the first stage.
The programme shall set out the general conditions under which and the
stages by which each type of service is to be liberalised.
2. In order to implement this general programme or, in the absence of
such programme, in order to achieve a stage in the liberalisation of a
specific service, the Council shall, on a proposal from the Commission
and after consulting the Economic and Social Committee and the European
Parliament, issue directives, acting unanimously until the end of the
first stage and by a qualified majority thereafter.
3. As regards the proposals and decisions referred to in paragraphs 1 and
2, priority shall as a general rule be given to those services which
directly affect production costs or the liberalisation of which helps to
promote trade in goods.
Article 64. The Member States declare their readiness to undertake the
liberalisation of services beyond the extent required by the directives
issued pursuant to Art. 63 (2), if their general economic situation and
the situation of the economic sector concerned so permit.
To this end, the Commission shall make recommendations to the Member
States concerned.
Article 65. As long as restrictions on freedom to provide services have
not been abolished, each Member State shall apply such restrictions
without distinction on grounds of nationality or residence to all persons
providing services within the meaning of the first paragraph of Art. 59.
Article 66. The provisions of Arts. 55 to 58 shall apply to the matters
covered by this Chapter.
CHAPTER 4. CAPITAL AND PAYMENTS
Articles 67-73. [repealed]
Article 73a. As from 1 January 1994, Articles 67 to 73 shall be replaced
by Articles 73b, c, d, e, f and g.
Article 73b. 1. Within the framework of the provisions set out in this
Chapter, all restrictions on the movement of capital between Member
States and between Member States and third countries shall be prohibited.
2. Within the framework of the provisions set out in this Chapter, all
restrictions on payments between Member States and between Member States
and third countries shall be prohibited.
Article 73c. 1. The provisions of Article 73b shall be without prejudice
to the application to third countries of any restrictions which exist on
31 December 1993 under national or Community law adopted in respect of
the movement of capital to or from third countries involving direct
investment--including investment in real estate establishment, the
provision of financial services or the admission of securities to capital
markets.
2. Whilst endeavouring to achieve the objective of free movement of
capital between Member States and third countries to the greatest extent
possible and without prejudice to the other Chapters of this Treaty, the
Council may, acting by a qualified majority on a proposal from the
Commission, adopt measures on the movement of capital to or from third
countries involving direct investment--including investment in real
estate--establishment, the provision of financial services or the
admission of securities to capital markets. Unanimity shall be required
for measures under this paragraph which constitute a step back in
Community law as regards the liberalization of the movement of capital to
or from third countries.
Article 73d. 1. The provisions of Article 73b shall be without prejudice
to the right of Member States:
(a) to apply the relevant provisions of their tax law which distinguish
between tax-payers who are not in the same situation with regard to
their place of residence or with regard to the place where their
capital is invested;
(b) to take all requisite measures to prevent infringements of national
law and regulations, in particular in the field of taxation and the
prudential supervision of financial institutions, or to lay down
procedures for the declaration of capital movements for purposes of
administrative or statistical information, or to take measures
which are justified on grounds of public policy or public security.
2. The provisions of this Chapter shall be without prejudice to the
applicability of restrictions on the right of establishment which are
compatible with this Treaty.
3. The measures and procedures referred to in paragraphs 1 and 2 shall
not constitute a means of arbitrary discrimination or a disguised
restriction on the free movement of capital and payments as defined in
Article 73b.
Article 73e. By way of derogation from Article 73b, Member States which,
on 31 December 1993, enjoy a derogation on the basis of existing
Community law, shall be entitled to maintain, until 31 December 1994 at
the latest, restrictions on movements of capital authorized by such
derogations as exist on that date.
Article 73f. Where, in exceptional circumstances, movements of capital to
or from third countries cause, or threaten to cause, serious difficulties
for the operation of economic and monetary union, the Council, acting by
a qualified majority on a proposal from the Commission and after
consulting the ECB, may take safeguard measures with regard to third
countries for a period not exceeding six months if such measures are
strictly necessary.
Article 73g. 1. If, in the case envisaged in Article 228a, action by the
Community is deemed necessary, the Council may, in accordance with the
procedure provided for in Article 228a, take the necessary urgent
measures on the movement of capital and on payments as regards the third
countries concerned.
2. Without prejudice to Article 224 and as long as the Council has not
taken measures pursuant to paragraph 1, a Member State may, for serious
political reasons and on grounds of urgency, take unilateral measures
against a third country with regard to capital movements and payments.
The Commission and the other Member States shall be informed of such
measures by the date of their entry into force at the latest.
The Council may, acting by a qualified majority on a proposal from the
Commission, decide that the Member State concerned shall amend or abolish
such measures. The President of the Council shall inform the European
Parliament of any such decision taken by the Council.
Article 73h. Until 1 January 1994, the following provisions shall be
applicable:
(1) Each Member State undertakes to authorize, in the currency of the
Member State in which the creditor or the beneficiary resides, any
payments connected with the movement of goods, services or capital, and
any transfers of capital and earnings, to the extent that the movement of
goods, services, capital and persons between Member States has been
liberalized pursuant to this Treaty.
The Member States declare their readiness to undertake the liberalization
of payments beyond the extent provided in the preceding subparagraph, in
so far as their economic situation in general and the state of their
balance of payments in particular so permit.
(2) In so far as movements of goods, services and capital are limited
only by restrictions on payments connected therewith, these restrictions
shall be progressively abolished by applying, mutatis mutandis, the
provisions of this Chapter and the Chapters relating to the abolition of
quantitative restrictions and to the liberalization of services.
(3) Member States undertake not to introduce between themselves any new
restrictions on transfers connected with the invisible transactions
listed in Annex III to this Treaty.
The progressive abolition of existing restrictions shall be effected in
accordance with the provisions of Articles 63 to 65, in so far as such
abolition is not governed by the provisions contained in paragraphs 1 and
2 or by the other provisions of this Chapter.
(4) If need be, Member States shall consult each other on the measures to
be taken to enable the payments and transfers mentioned in this Article
to be effected; such measures shall not prejudice the attainment of the
objectives set out in this Treaty.
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