WRITTEN QUESTION E-0229/02

by Bruno Gollnisch (NI) to the Council

(7 February 2002)

Subject: Persistence of foreign-exchange fees within the euro zone

It is now two years since the official introduction of the euro in the form of cheques and postal orders, and one month since the introduction of euro notes and coins throughout the Union. All foreign-exchange charges between banks within the euro zone should have disappeared, but this is simply not so.

Cheques issued in one country of the euro zone and cashed in another are still subject to the same bank charges; withdrawal of cash or visa card payments in a country other than that of issue are charged for; even international transfers between accounts are still subject to significant bank charges, which used to be justified in the past in terms of exchange transactions which no longer take place. These abuses are an affront to the principle of freedom of movement of capital and services provided for in the Treaty of Rome, and to the single financial market, whose establishment was so trumpeted by the Treaty of Maastricht.

They completely nullify the main advantage claimed by the backers of the single currency, namely the disappearance of exchange transaction charges.

Is the Council going to put an end to these manifest affronts to the freedom of movement of capital services and to the principle of a single financial market?

Does the fact that bank charges remain as high as ever, despite the fact that they are no longer subject to exchange rate fluctuations, not constitute an abuse?

Does the fact that this abuse is standard practice not point to illegal understandings between various of the major players within the European banking system?

Reply

(25 June 2002)

The Council shares the Honourable Member's concern to defend the interests of the European consumer.

It is that concern that led the Council to reach political agreement on 26 November 2001 on a Regulation on cross-border payments in euro; a Commission proposal had been submitted to it in August 2001 after a study had shown that the average cost of cross-border transfers had hardly changed for several years.

That text was also supported by the European Parliament, with which the Council had in any case co-operated fully, which led to the adoption of Regulation No 2560/2001 of the European Parliament and of the Council of 19 December 2001on cross-border payments in euro(1).

The Regulation provides, in the case of electronic payment transactions (withdrawals of cash and payments by means of a card), that from 1 July 2002 the charges levied by a financial institution for cross-border transactions must be aligned on the charges it levies for similar transactions within the Member State in which the card is issued. The date was chosen in the light of the time necessary to adapt the system and the extra work involved for financial institutions in the transition to the euro on 1 January 2002.

The same principle of equal charges for cross-border credit transfers and those effected within a Member State will apply from 1 July 2003, that date being chosen so that the infrastructure necessary can be set up.

Both electronic transactions and credit transfers are governed by the principle of the transparency of charges levied, even where a currency other than the euro is involved in a cross-border payment transaction in euro.

The Council did not consider it appropriate at present to apply the principle of equal charges to paper cheques as by nature they cannot be processed as efficiently as the other means of payment, in particular electronic payments. However, the principle of transparent charges also applies to cheques.

It should also be recalled that because of the disappearance of the Eurocheque on 1 January 2002 the cheque is essentially used for payments made within a Member State and in certain Member States no longer exists.

The Regulation also provides that not later than 1 July 2004 the Commission shall submit to the European Parliament and to the Council a report on the application of this Regulation and in particular on the advisability of improving consumer services by strengthening the conditions of competition in the provision of cross-border payment services. That report will be accompanied, where appropriate, by proposals for the amendment of the Regulation.

The Honourable Member is reminded that the Commission is responsible for the application of the rules of competition, including unlawful agreements.

(1) OJ L 344, 28.12.2001, p. 13.