WRITTEN QUESTION E-0652/01

by Cristiana Muscardini (UEN) to the Commission

(6 March 2001)

Subject: Common policy with regard to credit and loans granted at exorbitant rates

The Commission is undoubtedly aware of the dispute in Italy between the banks and consumer protection associations, sparked off by a number of judgments delivered by the courts allowing consumers to apply to their banks for the reimbursement of monies, on the grounds that banks have been guilty of charging compound interest (a perverse mechanism enabling rising interest rates to be charged on current account overdrafts) and offering loans at fixed rates only then often to apply interest rates above those considered to be usurious and therefore illegal under a law of 1996.

The attempts at mediation made by the government have not yet been sufficient to reassure citizens who are starting to wonder whether the Italian banking system is means of effecting legalised theft and whether it really is part of the European monetary zone.

Can the Commission say:

1. Whether it considers the two systems referred to above, as operated by the Italian banks, to be compatible with membership of the Euro zone;

2. Whether the European Central Bank has competence in this area;

3. Whether it considers that the situation described above, involving disproportionate interest rate rises, constitutes a barrier to competition for undertakings that are forced to take out loans to fund investment aimed at ensuring growth;

4. What institution should take action in order to prevent Italian firms, who are being charged these rates, from being disadvantaged compared with their European competitors;

5. What steps it intends to take in order to ensure that such systems cannot be operated in Italy or the other Member States?

Answer given by Mr Bolkestein on behalf of the Commission

(23 April 2001)

The Commission already stated in its answers to Parliamentary Questions P-4157/00(1) and P-0118/01(2) by Mr Nobilia that the definition of usury rates in Italy in relation to the interest rates applied by banks is the subject of a complaint by Associazione Bancaria Italiana (ABI), Associazione Italiana Banche Estere (AIBE) and the European Banking Federation (EBF). The Commission gave the Italian Government until 20 February 2001 to present its observations, but this was extended by one month to take account of the parliamentary process for the conversion of Decree-Law No 394 of 29 December 2000 so that the question could be examined in detail, with due regard for the new provisions of conversion Law No 24 approved on 28 February 2001. Once the Commission has analysed the observations of the Italian Government, it should be in a position to carry out an in-depth assessment of usury-related practices by the Italian banks with reference also to the matters raised by the Honourable Member.

It must, however, be pointed out from the outset that the definition of the crime of usury and of the parameters for determining the interest rates charged are matters of criminal law and are the responsibility of the individual Member States. The Community institutions act in this area, on a case by case basis, only to the extent that national measures are contrary to the principles of Community law.

In general, as regards interest rates charged by banks, the Commission bases its action on the principle of an economic policy which is founded on the internal market and conducted in accordance with the principles of an open and competitive market economy. It is thus up to each credit institution to formulate its own commercial policy on the basis of its assessment of the market and the risks involved, in accordance with the provisions applicable, especially the rules on competition and the principles of transparent transactions.

As regards the problem of compound interest, the Commission has responded to a complaint from an Italian consumers association by launching a survey to determine whether the EC Treaty rules on competition have been infringed.

(1) OJ C 174 E, 19.6.2001, p. 241.

(2) OJ C 187 E, 3.7.2001, p. 190.