European regionalism with its various differing national restrictions is still proving to be a barrier to the complete integration of the European Single Market in terms of financial services. And it's savers who are paying dearly for it.

For example, up to 5 billions euros could be saved every year if a truly integrated single market could be created for fund products with larger fund volumes. These billions of euros would be of great benefit to savers who have invested their money in funds. This is just one of the findings of a study carried out by the Mannheim Centre for European Economic Research (ZEW) together with the Institute for European Politics (IEP) in Berlin to investigate the problems faced by financial services in the Single Market. The study, entitled "The Benefits of a Working European Retail Market for Financial Services", was created for the European Financial Services Round Table.

Although the Single Market has been officially fully integrated since 1993, many EU countries still turn to loopholes in tax law or claim to be acting in the interests of consumer protection in order to seal off their markets. And it is consumers who are footing the bill, according to the ZEW study, for example in the form of excessive loan interest rates. Between 1995 and 1999, for a loan of 100,000 euros lenders would be charged, depending on the EU Member State, interest which was up to 2,600 euros above the interest in a fully integrated market.

The analysis goes on to show that it is not only consumers who would benefit from greater integration and more competition between European banks and insurers. Such a move would also have a positive influence on economic growth. Last but not least, the euro would also benefit if politicians finally started doing more to break down national borders in financial services. The international position of the euro in relation to the US dollar might also be strengthened through further integration of financial markets.

However, ZEW researchers also pointed out that lawmakers are not the only ones responsible for making a breakthrough in this area. Consumers should also finally start making unbiased comparisons of financial products in their own countries and those offered by foreign providers.


Dr. Friedrich Heinemann, Telefon: 0621/1235-149, E-Mail:

Dr. Martin Schüler, E-Mail:





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