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The European Commission Seeks Common Fees on Cross-Border Financial Transactions. From the Financial Times
Jul 25, 2001

The European Commission has lost patience with euro-zone banks and their promises to reduce costs for cross-border payments, internal market commissioner Frits Bolkestein said on Tuesday, July 24, 2001.

"Banks led us to believe they were taking practical steps to bring down the costs of cross-border transactions. Despite 11 years of dialogue, banks have not delivered on what they promised," Bolkestein told a news conference in Brussels.

The Commission proposal seeks that EU banks apply the same charges on euro transfers between member states as for domestic transfers. "In the last eight years, the cost of a transfer of 100 euros has fallen 50 euro cents from 24 to 23.5 euros," he said. "Some banks have already expressed their stiff opposition before the proposal has been presented. I expect banks to understand that the commission's patience is exhausted," he said.

The commission's proposal is for banks to apply a common fee on euro cash withdrawals and card payments from Jan 1, 2002, and on cheques and bank transfers from January 1, 2003, he said. The regulation proposes the common fee for transactions up to 50,000 euros, requires advance information on fee changes, and is subject to European Parliament and member state approval, he said.

The regulation would apply to euro transfers made between all 15 European Union member states, including Britain, Denmark and Sweden, which remain outside the euro zone, he said.

The commission will consider it serious if banks increase domestic charges to pay for cross-border transfers, and the body "is not impressed" by threats from banks to withdraw cross-border services, he said.

Bolkestein said that he expects the European parliament to support the measures, but admitted that the situation concerning support by member states is "different". "We will see how this develops," he said.

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