News Blog

Access to banking services, the Commission is not stingy with contradictions

(B2) Curious study presented on May 28 by the European Commission at a conference in Brussels on access to banking services for the poorest. What do we learn there?

Millions of Europeans are excluded from banking services. Two out of ten adults — in the European Union of 15 (Western Europe) — cannot carry out banking transactions. About three in ten have no savings and four in ten have no credit, although significantly fewer (less than one in ten) complain of obstructed credit. France is – along with the Netherlands – the country with the lowest marginalization rate: 3% of the population is unbanked and 2% is excluded from financial services (62% and 48% in Poland!).

The situation is worse in Central and Eastern Europe. A third of the citizens of the new Member States (EU-10) are victims of financial exclusion, more than half of them do not have a bank account or savings and nearly three-quarters cannot obtain renewable credits.

The poor, migrants, inhabitants of disadvantaged areas concerned. Are especially concerned people who live on low incomes are the first affected. But the “fact of living in a disadvantaged area increases the likelihood of financial exclusion”, in the same way as the fact of living in a rural area in the new Member States, underline the authors of the study.

The causes are multiple. Many factors are linked to the supply and demand for services: banks refusing to open traditional current accounts for certain categories of people; lack of accessibility; substandard services and high cost of services. In addition, some citizens do not trust financial institutions or fear losing control of their money and therefore prefer not to use a bank account. Certain changes in society, such as the aging of the population combined with the technological gap, contribute to reinforcing financial exclusion.

Among the solutions which make it possible to reduce this exclusion, the authors highlight two: the development of simple and inexpensive current bank accounts by conventional commercial service providers; the action of service providers with a social vocation (including savings banks, postal services and other mutual and cooperative establishments) who are sometimes the only ones to offer this service (France, Austria.

Purely contradictory. Basically, this study – commissioned by the Commission (DG Employment and DG Internal Market) – justifies that the exclusivity granted to certain (less commercial) banking networks is effective in the fight against financial exclusion. It completely contradicts the decision of Neelie Kroes – of the same European Commission – who, in the name of the rules of free competition, ordered France to eliminate the monopoly on the A booklet. This confirms our previous analysis.

Conclusion. It will perhaps be necessary for a moment to reframe the “ayatollahs of competition” (this qualification does not come from me but from a member of a commissioner's cabinet!) who only think about the pure application of the rules of competition (which is justified from a certain point of view) without thinking about the “collateral” effects of their decision. “Competition” cannot justify everything, it cannot be the policy objective, it is only a means, Nicolas Sarkozy confided to journalists during a European summit.

What they said. «Public authorities, both at national and European level, must ensure that all Europeans can obtain and normally use the financial services they need» – Vladimir Spidla, European Commissioner for Employment and Social Affairs. “Well-functioning markets with clear rules and strong competition are important drivers for promoting social inclusion. (…) The Commission seeks a balance between the social agenda and the economic agenda. These two agendas should not contradict each other and one can stimulate the other » – Charlie McCreevy, Commissioner for Internal Market and Services.


NB: this study was conducted by the Réseau Financement Alternatif (Belgium), the University of Bristol (United Kingdom), the University of Milan (Italy) and the Warsaw School of Economics (Poland)

The study (in English only!) can be found on financial inclusion page of the Commission. For the summary here

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).