A4-0048/97

Resolution on the Commission Green Paper on financial services - meeting consumers' expectations (COM(96)0209 - C4-0339/96)

The European Parliament,

- having regard to Article 129a of the EC Treaty,

- having regard to the Commission's Green Paper 'Financial Services - Meeting consumers' expectations¨ (COM(96)0209 - C4-0339/96),

- having regard to the 1980 Rome Convention on the Law applicable to Contractual Obligations ((OJ L 266, 9.10.1980, p. 1.)),

- having regard to the common position adopted by the Council with a view to adopting a European Parliament Directive on the protection of consumers in respect of distance contracts ((OJ C 288, 30.10.1995, p. 1.)),

- having regard to the Second Banking Directive (89/646/EEC) ((OJ L 386, 30.12.1989, p. 1.)),

- having regard to the opinion of the Economic and Social Committee (CES 802/96),

- having regard to the report of the Committee on the Environment, Public Health and Consumer Protection and the opinions of the Committee on Economic and Monetary Affairs and Industrial Policy and the Committee on Legal Affairs and Citizens' Rights (A4-0048/97),

A. whereas the aim of the Green Paper is not to be exhaustive and cover all aspects of financial services, but rather to launch a general debate on these services involving consumer organizations, industry, other EU institutions and Member States,

B. whereas the cross-border nature of financial services offered to consumers is destined to expand rapidly,

C. whereas, in the perspective of the single currency, the Community's legislative framework regulating financial services must be carefully assessed,

D. whereas an effective European market in financial services will enhance the consumer's freedom of choice and thus market efficiency,

E. whereas consumer legislation should be elaborated in parallel with internal market legislation,

F. whereas EU legislation on financial services has until now primarily served the achievement of the internal market and taken only limited account of consumer protection; whereas, in particular as a result of recent technological developments, shortcomings have emerged in the legislation on consumer protection,

G. whereas Community legislation must be updated with provisions for the dynamics of the financial services sector as expressed by:

- the globalization of financial markets and the introduction of new technology, which have created both new financial products and new marketing techniques;

- the economic, social and cultural impact of these developments;

- the introduction of the Euro which will change fundamentally the working conditions for the financial sectors and make crossborder financial services more accessible to the consumer,

H. whereas the present restrictions and costs attached to cross-border transactions prevent consumers from taking advantage of the internal market's benefits,

I. whereas there have been cases where vulnerable persons have been defrauded or misled by unscrupulous financial operators, demonstrating the need for strong consumer protection at European level,

1. Recognizes the importance to the consumer of a completed, competitive internal market in financial services, which must lead to lower prices, greater choice and a high quality of products and services;

2. Notes that, regrettably, the internal market in financial services and insurance has still not been completed, and that the consumer consequently is unable to enjoy its advantages to the full;

3. Welcomes, for this reason, the Commission Green Paper on Financial services: meeting consumers' expectations and regards it as a serious attempt to identify and remedy shortcomings in the law;

4. Notes that the Green Paper clearly shows that there are asymmetries and imbalances on the market for financial services and that the consumer - in general - is the weaker party in the contractual relationship;

5. Considers it, however, to be insufficient if the Commission concentrates on distance selling and new electronic means of payment and believes a thorough analysis of consumer protection is urgently needed in the area of legislation on banking, securities and insurance;

6. Believes that Community legislation should aim to guarantee greater competition on the supply side, effective freedom of movement on both the supply and demand sides, provision of adequate, accurate and effective information for individual consumers, and greater transparency and certainty regarding cross-border contracts;

7. Believes that a global approach is needed, which takes into account the dynamics of the financial services sector on the one hand, and the expectations of European consumers on the other;

8. Believes that the Community should employ its powers under Articles 100a and 129a to enable European consumers to enjoy the full benefits of the internal market for financial services;

9. Notes that the legal framework governing financial services is fragmented and sometimes even potentially contradictory as demonstrated by the rules on taxation in the field of insurance;

10. Believes that contracting parties should be able to opt, wherever possible, for the application of national law, bearing in mind the principles laid down in the case-law of the Court of Justice and in the Rome Convention of 1980;

11. Notes that the absence of fiscal harmonization represents a serious obstacle to the operation of the internal market in the banking and insurance sector and regrets that some Member States are introducing national fiscal measures on protectionist grounds;

12. Calls on the Commission consequently to act more strictly against fiscal measures (in particular the non-tax-deductibility of expenses such as life insurance or loan contracts incurred in another Member State) that obstruct the operation of the internal market, and welcomes in that connection the Judgment of the Court of Justice in the Wielockx case ((Case C-80/94, Judgment of the Court of 11 August 1995, G.H.E.J. Wielockx vs Inspector of Direct Taxation.));

13. Notes that the concept of the 'general good¨ is not subject to a common non- discriminatory definition and may hence be applied in a way that creates barriers to competition and the free movement of services;

14. Urges the Commission consequently to act on its own draft communication on the freedom to provide services and the interest of the general good in the Second Banking Directive ((OJ C 291, 4.11.1995, p. 7.)) and to request the Member States to make available to the Commission and also to market operators a list of all rules in the 'interest of the general good' that are applicable to the banking sector; calls on the Commission to lay down guidelines, by analogy with the banking sector, for the use of the term 'interest of the general good' also in the insurance sector;

15. Calls on the Commission to submit proposals for a definition of 'interest of the general good' such that excessive deviations from the principle of reciprocal recognition can be avoided;

16. Notes that the activity of some non-regulated financial intermediaries is detrimental to both European consumers and the financial industry and therefore calls on the Commission to bring forward a proposal for a directive on non-regulated financial intermediaries;

17. Calls on the Commission to act urgently on the European Parliament's resolution of 26 October 1995 on the settlement of claims arising from traffic accidents occurring outside the claimant's country of origin ((OJ C 308, 20.11.1995, p. 108.));

18. Asks the Commission, in accordance with the principle of freedom to fix prices as laid down in the Third Insurance Directive, to take action against Member States that impose a no-claim discount scale for motor vehicle insurance as the uniform and compulsory system under national legislation;

19. Calls on the Commission, with a view to the smoother operation of the internal market, in cooperation with the sectors concerned to investigate in what way general minimum provision for insurance contracts could be harmonized without jeopardizing the existing range of insurance products;

20. Believes that consumers are entitled to equal levels of information and education on their rights throughout the European Union;

21. Considers that the consumer must as a matter of urgency be well advised as to the available options in an internal market in financial services and insurance; considers that the 'Citizen in Europe' initiative is an appropriate means of meeting that requirement;

22. Takes the view that the introduction of Economic and Monetary Union will put the consumer in a better position to make comparisons between financial services in more than one country, and so will make cross-border financial services more accessible;

23. Believes that equal rights of redress should be enjoyed by consumers throughout the European Union and that existing inequalities in the opportunities for exercising these rights must therefore be addressed;

24. Notes that the concept of and the regulatory framework for ombudsmen and comparable arbitration schemes in financial services differ widely in Member States;

25. Supports arbitration and conciliation units for the financial and insurance sector, on condition that there are comprehensive guarantees of impartiality and that consumer and service-provider interests enjoy equal representation on such arbitration and conciliation units; takes the view that the arbitration and conciliation units should report on the complaints lodged and on their outcome, and that extensive publicity should be given to that information in respect of both providers and consumers;

26. Hopes that the ombudsmen will be closely associated with the preparation, introduction and assessment of legislation in the financial and insurance sector;

27. Calls on the Commission to look carefully into the correct implementation of and compliance with the directives relating to financial services and insurance by the Member States, and to take more stringent action against Member States that fail to implement existing Community legislation;

28. Notes the low compliance with Recommendation 87/598/EEC on a European Code of Conduct on Electronic Payments ((OJ L 365, 24.12.1987, p. 72.)) and Recommendation 88/590/EEC on Payment Systems and Payment Cards ((OJ L 317, 24.11.1988, p. 55.));

29. Therefore invites the Commission to carry out a thorough and exhaustive analysis of the existing legislation with a view to identifying the scale and the dimensions of the dysfunctionalities of the consumer aspects of the legislation covering financial services in the sector of electronic payments and payment cards and to draw up on the basis of that analysis a legislative proposal on electronic payments and credit and payment cards;

30. Regrets the fact that the Green Paper does not take into account the changes to which the introduction of the euro will give rise;

31. Believes that the Commission should be wary of the consequences for the financial services sector of setting up a monetary area without frontiers;

32. Considers that transnational contracts should use the euro as their basic currency as soon as it becomes legal tender;

33. Believes that the directive on cross-border transfers must be amended in the light of the disappearance of the exchange transactions which underlie the provisions currently in force;

34. Urges the Commission to introduce the concept of 'eurocompatibility¨ in all its actions in this field, i.e. to take into account the introduction of the euro by 1 January 1999 in whatever steps it takes;

35. Urges the Commission to encourage dialogue between the consumer associations and the professional associations and bodies of the various financial services with a view to identifying every opportunity for non-legislative solutions based on common agreement;

36. Calls on the Commission to propose as swiftly as possilbe legislation on the outstanding matters requiring solutions;

37. Suggests that this legislation could consist partly of a horizontal framework legislation covering issues common to all financial services, and specifically including:

- information of consumers and transparency of markets and prices;

- protection of the contractual rights of the weaker party, including the right to withdraw from long-term contractual relationships and access to redress;

- quality and safety of financial products;

- competence and integrity of intermediaries;

- access to basic services, i.e. the right not to be excluded from the financial circuit of modern society;

- over-indebtedness, in relation to which the Commission should also be asked to examine the possibility of devising minimum provisions for positive credit rating by non-profit-making organizations, so as to prevent consumers becoming over-indebted;

and partly of vertical measures covering:

- technological aspects other than credit and payment cards and home- banking that require a specific approach;

- property/mortgage credit including financial schemes targeted at vulnerable groups;

38. Calls on the Commission to bring forward, within a year at the latest, a proposal for a directive on distance selling of financial products and contracts;

39. Calls on the Commission to keep it regularly informed of the findings of the different studies and research carried out on behalf of the Commission in the area of financial services;

40. Instructs its President to forward this resolution to the Council and the Commission.