EU Ministers Reach Agreement On Cross-Border Bank Transfers

by Philip Morton, Investors Offshore.com

28 November 2001

It was revealed on Tuesday that European Union single market ministers have managed to resolve a disagreement over cross-border bank transfer fees just five weeks before the introduction of the euro on January 1st 2002.

According to reports, single market ministers have agreed on a fee reduction for cross-border transfers of up to 12,500 euros. Transactions to this amount will be charged at national transfer rates when the new rules become effective on July 1st 2003. The German State Secretary for Justice, Hansjoerg Geiger also revealed that the fee limitation will be extended to cross-border transfers of up to 50,000 euros by the beginning of 2006.

This announcement will have displeased European banks, who had been lobbying against the imposition of a limit on fees for inter-Europe bank transfers. However, EU Ministers, and in particular the President of the European Commission, Romano Prodi, were worried that failure to reach an agreement could seriously damage the introduction of the euro next year.

'Without our proposal, consumers and small businesses would have to pay far too much to use the single currency in another member state, which could make the euro less attractive,' he warned in June.

Although the EU decision marks a victory for international businesses and European consumers, there will be many who have been surprised by the verdict, as the initial signs were not good- when the ministers entered Monday's discussions, six of the fifteen member states had stated their opposition to some or all of the recommendations.

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