STRATEGIC PARTNERS
July 24, 2001
BRUSSELS, Belgium -- European Union officials proposed rules on July 24 to stop banks from charging more for cross-border transactions than they do for domestic ones once the euro goes into circulation next year, according to an Associated Press report.
The proposal, which is expected to be adopted by the European Commission, the EU' s executive branch, would require banks to levy the same charges for ATM withdrawals or direct debit payments in euros as of Jan. 1. That is when the euro currency is to be introduced in 12 European countries, called "the euro zone."
Under the proposal, the banks would have until Jan. 1, 2003, to bring fees in line for cross-border checks and transfers between bank accounts up to 50,000 euros ($43,500).
The proposed regulations must be approved by national governments and the European Parliament to take effect.
The initiative follows a recent study that found the average price for a 100 euro cross-border transfer in the EU had risen to 17.36 euros ($15.11) in 2001 from 17.10 euros ($14.89) in 1999.
By contrast, banks charge nothing or a nominal fee for domestic bank transfers, which is how most people in Europe pay their bills.
"People will not expect to have to pay through the nose when they want to use euros in another member state, " said Frits Bolkestein, EU internal market commissioner.
He warned that the commission would consider taking additional action if banks in turn raise their fees for domestic transfers, noting that the European Parliament is behind him on this issue.
