ABSTRACT
This chapter examines the causes of the severe financial crisis at the end of the first decade of the 21st century and its consequences for the European economies. It addresses the consequences for merger and acquisition activities within and between European Union countries. Since the 1980s, the liberalization of capital movement and the deregulation of domestic financial sectors – which often occurred hand in hand – have improved the efficiency of the international financial markets enormously. The transition from capital restriction to the free movement of capital is an essential condition for the proper functioning of the single market. Exchange controls were only one of the barriers to free capital mobility, which in turn was only one of the barriers to a single market in financial services. The Treaty of Rome imposed no formal requirements concerning capital market liberalization. The free movement of capital was intended to permit movements of investments such as purchases of shares between countries.
