European Commision: Greek Measures Are 'Prima Facie, Justified'

        By Naftali Bendavid
        BRUSSELS--The European Commission said Monday Greece's new capital controls are "prima facie, justified."
        Jonathan Hill, the commissioner who oversees financial stability, issued a statement on behalf of the Commission saying member states of the European Union can impose restrictions on capital movement "which are justified on grounds of public policy or public security."
        Citing EU case law, Mr. Hill said such measures can also be introduced "for other overriding reasons of general public interest." Exceptions to the free movement of capital, he added, must be strictly interpreted, non-discriminatory and proportionate. Among other things, he said, that means any capital controls must be applied for the shortest time possible.
        The European Commission, the EU's executive body, oversees the relevant treaties. In that capacity, the Commission made its preliminary judgment that the Greek controls are justified.
        On Sunday, Greece ordered its banks to close for a week and imposed controls to prevent money from flooding out of the country.
        The Commission's statement said that under the current circumstances, the stability of Greece's banking and financial system "constitutes a matter of overriding public interest and public policy that would appear to justify the imposition of temporary restrictions on capital flows."
        Maintaining financial stability, it said, is the country's main immediate challenge.
        Although the measures "appear necessary and proportionate" for now, Mr. Hill's statement said, Greece must reinstate free movement of capital as soon as possible in the interest of Greece, the eurozone and the EU.
        Write to Naftali Bendavid at Naftali.Bendavid@wsj.com
        (END) Dow Jones Newswires

        June 29, 2015 03:01 ET (07:01 GMT)

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