20 November 2007

Commission presents single market review

The Commission set out a package of initiatives to modernise the European single market. Particular emphasis is given on further developing the single market as a driver for innovation, as springboard for businesses entering global markets, as an attractive location for investors and as a global rules and standards setter. A series of concrete policy initiatives are announced as part of the package.

"Today's package marks the start of a new cycle for the single market”, Commission President Barroso said.

Among others, the Commission makes proposals to further integrate retail financial services markets, to improve consumers' financial literacy and to facilitate switching bank accounts without a closing fee.

The Commission's retail financial services strategy is set out in the "staff working paper" attached to the package. It proposes a number of targeted initiatives designed to:

- improve customer choice and mobility, in particular for bank accounts, a financial product used by the vast majority of European citizens;

- help retail insurance markets work better, for instance by designing a "scoreboard " for car insurance premiums in Europe;

- move towards adequate and more consistent rules for distribution of retail investment products (such as investment funds, certificates etc.); and

- promote financial education, financial inclusion (access for all to a basic bank account) and adequate redress for consumers.

Proposals also include an overhaul of European consumer protection law, improving and simplifying contractual rights for consumers and granting them means of cross-border collective redress. A new Consumer Scoreboard will measure delivery on these policies.

Retail financial services measures include in particular:

- a White Paper on mortgage credit will be published towards the end. Work will continue on reviewing the credit intermediaries market with a view to assessing whether regulatory intervention is required.

- on bank accounts, the EU banking industry will be invited to develop, before mid-2008, via self-regulation, a set of common rules to the benefit of all customers.

- on payments, efforts will continue towards the development SEPA, in particular on ensuring a smooth and timely migration to SEPA products, on enhancing competition in the cards market and on developing high-value services such as e-invoicing.

- on product tying it is necessary to study current tying practices in all financial services areas and to assess the merits of a regulatory approach on unfair commercial practices in the field of financial services.

- on credit data an expert group will be created in 2008 to assist the Commission in the identification and analysis of adequate measures. Regulatory solutions could eventually be envisaged in this area.

- on product diversity the Commission will seek to identify the main restrictions that exist to lift the national rules that cannot be justified under EU law.

- the practicability of the so-called concept of '28th regime' should be assessed.

Furthermore, the Commission has just initiated a review of the need for a coherent approach to product transparency and distribution requirements for "competing" retail investment products by launching a call for evidence.

Finally, a Communication on Financial Education will soon be presented.

Communication on "A single market for 21st century Europe"

Press release

FAQ

Accompanying staff working papers:

The single market: review of achievements

This document reviews the main achievements of the single market to date and provides an overview of recent and ongoing initiatives.

Instruments for a modernised single market policy

This paper looks at the range of instruments available to shape and govern the Single Market, to learn from past experiences and assess how to best meet future challenges.

Implementing the new methodology for product market and sector monitoring: results of a first sector screening

This paper presents the preliminary results of the screening on the basis of the methodology defined in the "Guiding principles for product and market monitoring"

The external dimension of the single market review

This document focuses on the external dimension, which is a central element of the review as the increasing pace of global economic integration and further opening of the EU are probably the biggest changes the Single market is facing since its launch in 1985

Initiatives in the area of retail financial services

This paper identifies several areas where work should be undertaken in order to improve the competitiveness and efficiency of European retail financial services markets.

© Graham Bishop