Interview: MEP warns against EU-wide consumer rules on banking, insurance[fr][de] 

"The European Union has to come up with a basic set of minimum standards for consumer protection rules and an optional 28th regime for simplified pan-European products," said Socialist MEP and rapporteur for the Parliament's response to the Financial Services Action Plan (FSAP), Ieke van den Burg. 

However, she added that full harmonisation or mutual recognition on the basis of country of origin is "not desirable" as national traditions and competences regarding consumer protection need to be respected. A key fear is that maximum harmonisation could in fact lead to an overall reduction of protection levels. 

Her approach clashes with that outlined by the Commission at a public hearing on Retail Financial Services last year, where the Commission's Director General for the Internal Market Jörgen Holmquist advocated the adoption of EU-wide harmonised consumer protection rules (EurActiv 19/09/07). According to him, differing consumer protection rules in each member state are a "significant obstacle" to the competitiveness and efficiency of the market for retail financial services. 

But van den Burg stressed: "We should not be over-ambitious. Retail financial services are, and will continue to be, primarily domestic. Consumers will favour what is familiar to them, and what they can trust from tradition." 

The single market should be seen as an "instrument to serve consumers" rather than "just an aim to strengthen the position of some financial institutions that want to enlarge their scope of activities within the European Union, without adapting to all the different traditions," she cautioned. She believes that better educating consumers about the various financial products that exist and the risks related to them can, for a large part, compensate the need for increased consumer protection measures. 

"Financial education should be an integral part of primary education. Children need to be taught how financial products work and what the consequences would be if they decide to make use of financial services. Teenagers nowadays take expensive credit engagements without being aware of all consequences," she said. However, she also argued that education, however good, can never completely replace consumer protection. 

To read the interview in full, please click here.