WRITTEN QUESTION E-0238/99

by Michèle Lindeperg (PSE) to the Commission

(12 February 1999)

Subject: Payments in euros

'Pro-euro' European citizens were looking forward to being able, from 1 January 1999, to simplify their payment transactions when moving within the European Union by paying in euros (cheques in euros or banker's card). They saw this as one of the practical advantages of the abolition of exchange rate calculations and related charges, an advantage from which they hoped to benefit immediately.

However, they have seen that, while exchange charges have disappeared when payments are made in euros by cheque or banker's card, banking charges have risen so high as to make it unattractive for them to pay in euros in a European country other than their own.

Does the Commission not see this as likely to discourage the most ardent defenders of the euro and as a lost opportunity for some active and practical education on the advantages of the single currency?

Answer given by Mr Monti on behalf of the Commission

(1 April 1999)

The Commission is aware of the problems arising in connection with cross-border payments, whether in euros or in national units of account. However, intoduction of the euro could not have been expected to lead automatically to a situation in which no charges were imposed for the banking services linked to such payments.

In the case of cheques, several cases need to be distinguished. Where standard Eurocheques are concerned, the procedure is relatively straightforward since it is managed by centralised clearing agencies. In principle, the settlement process remains the same as before the start of stage three of monetary union, with the result that the level of charges is also unchanged. Where non-standard cheques (national cheques) are concerned, the settlement process is more complicated, with each cheque having to be processed manually. Such cheques do not, therefore, lend themselves to cross-border use, at least as regards small transactions.

As for banker's cards, the Commission has been striving for a long time to promote their interoperability. It is now increasingly common, for example, to obtain money from automatic cash dispensers abroad and even to pay for goods in shops abroad via sales terminals using cards issued in the cardholder's country of residence. According to the information in the Commission's possession, the charges imposed on such transactions, of which exchange charges account for only part, have also remained essentially the same. The Commission, however, is still looking into ways of improving those services. For instance, it is in contact with the banking community, examining the aspects relating to the interoperability of electronic purses. It hopes that these instruments, which lend themselves particularly well to the use of the euro, will contribute to the "active (...) education" quite rightly referred to by the Honourable Member.

Lastly, it should be remembered that, prior to the euro's introduction, financial institutions were able to impose at least some of their charges in the form of variable exchange rates which they applied to the transaction. They are now required to apply the fixed conversion rate and to show charges separately. The transparency of charges has thus improved, tending to provide customers with greater freedom to choose between the best offers.