Engaging with the outside world: the free movement of capital and third countries

The EU has a longstanding commitment to economic openness and trade between nations. This is nowhere more true than in the area of investment, where the EU has long been in the vanguard, promoting investment by European companies and investors into other Member States and third countries, and investment into the EU by third countries. This is in everyone's mutual interest and is all the more important now as the world emerges from the financial crisis and the economic downturn.

The EU's open investment approach is guaranteed by Art. 63 of TFEU, which explicitly states that: "all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited."

Nevertheless, such freedom cannot exist without sensible safeguards and protections. Third country investment must not expose EU Member States to national or public security threats. The Treaty allows Member States to protect themselves from such threats and also allows the EU to act either in emergencies or in normal economic circumstances if merited.

As well as ensuring that its markets are as open as possible to stable, secure and beneficial foreign investment, the EU has also consistently looked to promote these principles at a global level. It does this in a number of ways:

Through international fora and multilateral agreements;
Through bilateral investment dialogues and trade agreements;
Through the Enlargement process; and
Through relations with third country investors, and, in particular, Sovereign Wealth Funds.