The European Commission will "in the coming weeks" launch a new one million euro project to help young Europeans make the right choices for their savings and investments in a bid to prevent a repeat of the financial turmoil generated by the US sub-prime mortgage crisis.
The new project will be directed at young people and teachers. The objective is to help educators to incorporate financial matters into their classes and evaluate students on these topics.
“We plan to launch in the coming weeks a new major exercise to extend Dolceta to primary and secondary education,” said a Commission official speaking at a conference on consumer information and education organised on 16 April in Brussels by the World Savings Banks Institute (WSBI) and the European Savings Banks Group (ESBG), two of the largest international banking associations.
Up till now, Dolceta has focused on adult education. The new project aims to improve the service offered by the website in order to make it useful also to young people. In fact financial interests change with age. An adult tends to be more interested in how to invest or save money, whereas a young person usually needs information on how to use a bank account or a payment card.
The new project is designed to run for two years. It will complement the Europa Diary project, under which, in 2007, the Commission distributed more than two million copies of an education kit to 18,000 European schools to help teachers explain the basics of finance to their students.
Commission initiatives cannot currently go any further due to the provisions of the Treaties, which leave educational competencies to the member states.
Internal Market Commissioner Charlie McCreevy said: "Too many consumers lack a basic understanding of financial products and services. Financial education is a key element in empowering our citizens to take more appropriate financial decisions. I strongly encourage member states, consumer organisations, the financial industry and other stakeholders to take action to educate citizens on financial matters. The European Commission will also play its role."
Swedish MEP Olle Schmidt (ALDE) emphasised the depth of financial illiteracy across the EU: "Recent surveys conducted in Northern Europe show that 75% of people do not know the options available among financial products." "Another study conducted in Hungary indicated that 70% of the interviewees did not know the meaning of inflation," he said. "Financial education is important but we still do not know how to reach financial literacy," he concluded.
Doug Taylor of Which?, a UK consumer protection organisation, warned of the challenges ahead: "We cannot forget the difficulties in creating learning experiences that are good for all different life periods. Financial education is such a difficult task."
Camden Fine, President and CEO of the Independent Community Bankers of America stressed the importance of early education: "Schools need to educate students at all levels," he said, adding that it is also important to have programmes for adults.
At the beginning of April, the EU Council gave its final approval to a revised directive on consumer credit aimed at increasing and harmonising the protection of loan subscribers across the EU.
The directive standardises the information to be given when advertising loans to make it easier for consumers to compare different offers.
Last December, the Commission also issued a Communication on financial education establishing the basic principles to be followed by educators.
Financial education is also promoted across the EU by a range of other projects, the most important of which is Dolceta (Development of Online Consumer Education Tools for Adults), an interactive website that provides information on consumer rights and financial services.
- European Commission:Commission's proposal for reforming the Consumers Credit Directive(7 October 2005)
- EU Council:Agreement on Consumers Credit Directive(7 April 2008)
- European Commission:Communication on Financial Education(18 december 2007)
- European Commission:Press release on Financial education(18 december 2007)
- European Commission:Dolceta website
- European Commission:Europa Diary webpage