News
BackAbout 30 million people living in the European Union do not have a basic account. This has serious consequences for everyday life, for example when applying for a job or looking for a flat or simply going about one's daily business. The recommendation, which has now been published by the European Commission in respect of the right for all citizens to hold a basic bank account is a disappointment to the MEPs as it does not oblige the banks to provide every person with a bank account.
The Austrian Federal Chamber of Labour had already in the run-up to the debate in the European Parliament written a letter to EU Commission President Barroso in which it urged him to publish a legislative proposal on the right to a basic account before the end of the year. This letter had been forwarded to all MEPs for information.
During a hearing in the responsible Committee on Internal Market and Consumer Protection, MEP Evelyne Gebhardt of the European Social Democrats, who is in charge of this issue, spoke disappointedly of the Commission. Originally, EU Commissioner Michel Barnier had promised a Directive proposal on access to a basic account; however, now it had just become a non-binding recommendation. Yet, today a basic account would be a necessity in conducting all kinds of businesses. Gebhardt referred to the example of a female student who was looking for a flat in her university town. She was told that she would only get a rental agreement if she had a basic bank account. The bank in turn told her that she could only have an account if she was able to prove that she had a fixed address. This fate was shared by many people without an account, said the MEP.
The responsible Commission official explained that 7 percent, i.e. 30 million adults were living in the European Union who did not have access to a bank account. There were large differences between old and new Member States. 97 percent had access to an account in the old Member States. The new Member States, such as Bulgaria for example had regions, where 50 percent of the adult population did not have a basic account. Most transactions were still carried out in cash. There were different reasons why people did not have an account. Some would not trust the banks, others were afraid to enter a bank building. A lack of knowledge concerning the advantages of a bank account was also a motive. Some countries only had a poorly developed banking sector. Legal obstacles, such as the requirement of a fixed address would also be a problem in some cases. The banks try not to incur losses, for example in case that a customer’s address is unknown and that the account holder disappears. Apart from that, banks often preferred higher earners than people who live at the margins of society. However, it is not good for enterprises when parts of the population do not have access to a bank account as they are unable to participate in online transactions. Hence, the Commission had decided to recommend that all citizens should have access to a basic account. According to the Commission, 11 Member States already had some thoughts on the issue and a number of them had already adopted national legislation. An impact assessment shall provide a solution for this problem. A recommendation would be flexible and inform the Member States well in time about future plans. The Commission intends to take legislative action in summer 2012 if the Member States fail to react to the recommendation.
MEP Hans-Peter Mayer of the European Peoples’ Party agreed with his colleague Gebhardt and voiced similar criticism. Overdrafts and loans were not the issue, but only access to a basic bank account (on credit balance basis). He believes it is time to issue a legislative proposal. A recommendation would not take the issue a single step forward. But, there were still other problems, for example that some account holders could not make cross-border bank transfers, because their bank would not allow them to do so. MEP Ashley Fox of the European Conservatives also criticised the Commission; however, he does not think that regulations for each area would be necessary. Yet, his fraction had not come to a final conclusion. MEP Dennis De Jong of the European Left regards it as extremely important for the European Commission to take action. This would be especially important for those people who were at the margins of society. MEP Jürgen Creutzmann of the Liberals supports the option of making basic accounts available to citizens on credit balance basis.
Due to the absence of a legislative proposal by the Commission, the European Parliament - whether it likes it or not - has no chance but discussing the recommendation of the Commission. In the coming weeks, the responsible rapporteur for the European Parliament Evelyne Gebhardt will submit a draft report in the Committee on Internal Market and Consumer Protection.
Letter of the Austrian Federal Chamber of Labour to Commission President Barroso on the proposal on access to a basic account
During a hearing in the responsible Committee on Internal Market and Consumer Protection, MEP Evelyne Gebhardt of the European Social Democrats, who is in charge of this issue, spoke disappointedly of the Commission. Originally, EU Commissioner Michel Barnier had promised a Directive proposal on access to a basic account; however, now it had just become a non-binding recommendation. Yet, today a basic account would be a necessity in conducting all kinds of businesses. Gebhardt referred to the example of a female student who was looking for a flat in her university town. She was told that she would only get a rental agreement if she had a basic bank account. The bank in turn told her that she could only have an account if she was able to prove that she had a fixed address. This fate was shared by many people without an account, said the MEP.
The responsible Commission official explained that 7 percent, i.e. 30 million adults were living in the European Union who did not have access to a bank account. There were large differences between old and new Member States. 97 percent had access to an account in the old Member States. The new Member States, such as Bulgaria for example had regions, where 50 percent of the adult population did not have a basic account. Most transactions were still carried out in cash. There were different reasons why people did not have an account. Some would not trust the banks, others were afraid to enter a bank building. A lack of knowledge concerning the advantages of a bank account was also a motive. Some countries only had a poorly developed banking sector. Legal obstacles, such as the requirement of a fixed address would also be a problem in some cases. The banks try not to incur losses, for example in case that a customer’s address is unknown and that the account holder disappears. Apart from that, banks often preferred higher earners than people who live at the margins of society. However, it is not good for enterprises when parts of the population do not have access to a bank account as they are unable to participate in online transactions. Hence, the Commission had decided to recommend that all citizens should have access to a basic account. According to the Commission, 11 Member States already had some thoughts on the issue and a number of them had already adopted national legislation. An impact assessment shall provide a solution for this problem. A recommendation would be flexible and inform the Member States well in time about future plans. The Commission intends to take legislative action in summer 2012 if the Member States fail to react to the recommendation.
MEP Hans-Peter Mayer of the European Peoples’ Party agreed with his colleague Gebhardt and voiced similar criticism. Overdrafts and loans were not the issue, but only access to a basic bank account (on credit balance basis). He believes it is time to issue a legislative proposal. A recommendation would not take the issue a single step forward. But, there were still other problems, for example that some account holders could not make cross-border bank transfers, because their bank would not allow them to do so. MEP Ashley Fox of the European Conservatives also criticised the Commission; however, he does not think that regulations for each area would be necessary. Yet, his fraction had not come to a final conclusion. MEP Dennis De Jong of the European Left regards it as extremely important for the European Commission to take action. This would be especially important for those people who were at the margins of society. MEP Jürgen Creutzmann of the Liberals supports the option of making basic accounts available to citizens on credit balance basis.
Due to the absence of a legislative proposal by the Commission, the European Parliament - whether it likes it or not - has no chance but discussing the recommendation of the Commission. In the coming weeks, the responsible rapporteur for the European Parliament Evelyne Gebhardt will submit a draft report in the Committee on Internal Market and Consumer Protection.
Letter of the Austrian Federal Chamber of Labour to Commission President Barroso on the proposal on access to a basic account