Latin American Capital Markets

PROMOTING REGIONAL CAPITAL MARKET INTEGRATION 171of the European freedoms. 8 These mandatory requirements include ensuring the effectivenessof fiscal supervision, the fairness of commercial transactions, and the defenseof the consumer.Following the passing of the Single European Act, the Treaty of Rome wasamended to mandate the European Commission to draft a program of secondarylegislation to bring about what is called the Single Market.The aim of this is to makethe European Union "an area without internal frontiers in which the free movementof goods, persons, services and capital is ensured." 9 Although these freedoms were alreadyguaranteed in the original treaty, the Single European Act was passed for severalreasons. Among these were that it was believed that reliance on appeals to theEuropean Court to uphold the treaty would be costly, time consuming, and unpredictableand that the many technical and other barriers that were seen as restrictingthe European freedoms could best be removed by direct secondary legislation.Secondary LegislationAlthough the process by which secondary legislation is passed in the European Unionis complicated, certain elements of it have important implications for the nature ofthe law that is adopted and indeed have critically affected the legislation intended topromote the integration of the European capital markets. The basic and initial elementsof the co-decision procedure normally now employed are as follows.The European Commission initiates secondary legislation, making a proposalto the Council of Ministers of all the member states.The European Parliament thendelivers an opinion on the proposal to the council.The council then discusses the proposal,and amendments to it, before voting on it, typically using a qualified majorityscheme in which different member states have different numbers of votes, with thelarger countries having more votes than the smaller countries. If the proposal is accepted,it is again communicated to the European Parliament, which then votes to acceptor reject the proposal. Once a proposal is finally passed into European law, followingfurther European Union institutional procedures, it then has to be transposeton equivalently implemented into national law in each of the member states. Thitmeans that each member state has to take the European Union proposal and adoptan appropriate form of it via its national parliament into its own law. If a memberstates does not do this, or does not then follow the law, the European Commission8 Rewe Zentral AG v. Bundesmonopolverwaltung fur Branntwein.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub9 Article 8a,Treaty of Rome (1957).