06 February 2013

Eurofinas response to the European Commission's consultation on European households' over-indebtedness

Eurofinas welcomes the recognition that the analysis of households' over-indebtedness should be as broad as possible, but is concerned by certain potential methodological and statistical limitations in the study.

Eurofinas welcomes the opportunity to respond to the consultation on the preliminary findings of the study on over-indebtedness of European households commissioned by the European Commission’s Directorate General for Health and Consumers.

Eurofinas welcomes the recognition that the analysis of households’ over-indebtedness should be as broad as possible to encompass:

• the various types of debts (amounts and characteristics),
• characteristics of households and
• wider economic and social conditions (price of housing, tax pressure, wages level, utilities etc.)

This is important to get a fair view of the situation of households in financial distress, and a better understanding of the risk factors.

However, Eurofinas is concerned by certain potential methodological and statistical limitations in the study. For example, it is mentioned that a total of 120 face-to-face interviews have been conducted with over-indebted households in six countries. Though Eurofinas appreciates that this has been conducted in addition to desk research and stakeholders interviews, this is too small a sample to reach any valid conclusions let alone for the entire EU. Eurofinas would welcome more information on the exact scope and methodology of these interviews.

Additionally, Eurofinas believes that the various indicators listed in the summary document require further analysis. For example, the seriousness of a household’s level of arrears must be assessed before being treated as over-indebtedness. Similarly, a household’s difficulty to make ends meet requires a proper evaluation to identify truly problematic situations.

The summary document does not provide sufficient detailed information on both the sources and content of findings. Eurofinas therefore asks the Commission also to consult stakeholders on the final report of the study once the latter is made public.

Full response

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