On Tuesday, the European Parliament adopted the own-initiative report on Retail Financial Services by a broad majority. With this report, the European Parliament is responding to the EU Commission’s Action Plan to facilitate cross-border financial services on European financial markets. The report that stands in the broader context of the Capital Market Union legislation and was supported by a large majority of Greens (Greens/EFA), Christian Democrats (EPP), Social Democrats (S&D) and Liberals (ALDE), while the right-wing Conservatives (ECR) mostly abstained and the Left (GUE) and extreme right (EFDD and ENF) voted against it.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“This report sends a strong signal for both more competition and consumer protection on European financial markets. The capital market union makes sense if further integration of the financial markets ensures more competition and comparability of products for the benefit of consumers. Financial services will only enjoy cross-border confidence if a high level of consumer protection and legal certainty is guaranteed everywhere.
On Green initiative, the report calls for tougher but simpler rules. We must protect businesses and consumers from unnecessary bureaucracy. Consumers need clarity about the risks of a product rather than a large pile of paper with useless information. We call on the EU Commission to come forward with proposals in this regard. The Commission is called upon to identify and publicise existing obstacles to international payment transactions by means of covert test purchases (“mystery shopping”). The Commission must use its regulatory power to create simple and sustainable financial products that are profitable for consumers and not just for suppliers. We demand to overcome the patchwork of different consumer protection rules for banks, insurance companies and investment funds in order to combine fair competition, lower costs and reduced bureaucracy. In the future, market participants will also be able to obtain better information on the environmental and social impacts of financial services.
Financial companies should not exploit their information advantage to the detriment of their customers. For this reason and due to our contribution, the report demands that companies must provide product information for a clear EU website in the future. Customers could thus compare the products offered to them across Europe according to financial, social and ecological criteria. Many financial institutions offer loans to customers, although it is clear that they will not be able to afford interest and repayments in the foreseeable future. This can destroy personal livelihoods and, if it happens systematically, lead to new financial crises. The ball is now in the Commission’s court to stop the aggressive sales strategies and better protect consumers.
The general rejection of the report by the Left Party is regrettable. Promoting the euro, while at the same time rejecting greater integration of the capital markets, is ultimately against European solidarity. Only integrated capital markets can distribute the burden of economic crises onto as many shoulders as possible accross the regions of the eurozone.”
You can read the report here: