Legal Mechanism of EU Capital Markets Union: Will Free Capital Flow Provided?

Abstract

The article examines the historical, economic and legal aspects of the evolution of free of capital flow in the European Union, contemporary stage of ensuring that was the construction of the Capital Markets Union. The authors identify the correlation between ensuring the freedom of capital movement and control mechanisms for such flow, defining the legal means of EU institutions aimed at establishing an appropriate balance in its legal regulation. The authors characterize the features of the construction and functioning of the Capital Markets Union, touch upon the organizational and legal mechanism herein, and also explore the correlation of the Capital Markets Union with other projects of European financial integration development (Economic and Monetary Union, Single Market in Financial Services and European Banking Union). In this regard, special attention is paid to the European Financial Supervision System, mainly to the European supervisory authorities, which unites various financial integration projects. In addition, the authors draw focus to the correlation between the method of harmonization and the method of unification in the implementation of further steps by EU institutions in the field of financial integration. To achieve the research goal, two groups of research ways and means were used: general research ones (methods of cognition, description, analysis, induction, deduction, comparison) and special methods of study (formal legal, comparative legal, structural legal, historical methods). As a result of the analysis, the authors conclude that the construction of a Capital Markets Union makes it possible to ensure the reliable implementation of the free capital flow under the European Union jurisdiction in the long term. The creation and functioning of the Capital Markets Union is a complicated process indeed, as it correlates with other financial integration projects within the European Union, including contributing to the construction of a single integrated financial market. At the same time, a striking feature of such financial integration is the gradual transition from the harmonization method to the unification method, which allows for the establishment of uniform regulatory rules on specific issues for all member states, which strengthens the role of supranational regulation of European Union financial markets and supervision of them by European supervisory authorities.