Disgrace at the heart of Europe

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Disgrace at the heart of Europe

After nearly a decade of fanfare, the single European market for financial services is a ghost of what it should be. Turf battles, protectionism, and the inertia of Brussels decision-making conspire to frustrate cross-border financial business. There's still no Europe-wide bank account. But the euro and the pressure of electronic commerce have panicked EU mandarins. Things are moving - a decade too late. Behold the Financial Services Action Plan. David Shirreff reports.

Objectives of the financial services action plan


If God, Niccolò Machiavelli, or Isambard Kingdom Brunel had designed the single European market they would now be standing in the corner with a dunce's cap on. Financial services, which should be at the heart of the single market and the engine of pan-European growth, are still stuck behind national barriers. It is as if the launch of the single market in 1992 and the introduction of a pan-European currency in 11 countries this January have added nothing to the quality of services that retail consumers or even the average company can enjoy.

The problems have been protectionism - a fear that once the floodgates are open the Anglo-Saxons will dominate financial services - turf wars within the European Commission, and turf wars between the 15 member states. The enemy has been the time it takes to draw up and refine European legislation, or a common code of conduct, and then enforce it.

It's impossible to have a pan-European bank account. Retail bank charges for intra-euro business are still excessive - conversions between components of the euro average 5.5%, and cross-border transfers 8.4%,


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