Brian Hayes MEP today said that the European Commission’s new proposals on retail financial services have the potential to create a real internal market for everyday financial products such as mortgages. EU Commissioner for Financial Services Jonathan Hill is due to launch the Commission’s Green Paper on Retail Financial Services this Thursday 10th December.
“Commissioner Hill recently said to me that the EU institutions need to think about everyday financial services from a consumer point of view and come up with ways to improve our internal market. I believe Commissioner Hill has taken a bold step in addressing the problems that consumers face when they try to go to another country and buy a financial product.
“Only 3 percent of consumers in the EU have availed of a mortgage, credit card or insurance product in another member state. This is an embarrassing statistic for our internal market which should ultimately be working on behalf of the consumer.
“Irish consumers currently face serious problems availing of reasonably priced mortgages – in particular, Irish consumers face rip-off prices for variable rate mortgages. There’s no reason why the EU couldn’t have a well-developed internal market for mortgages. The average variable mortgage rate in Ireland is 4.18%, almost 2% higher than the Eurozone average. In Germany or France, for example, you can get long-term fixed interest mortgage for less than 3%. If we’re part of an internal EU market, why shouldn’t Irish customers be able to get a mortgage from a German or French bank?
“The reality is that the EU’s internal market does not work properly when it comes to buying financial services products. Consumers are forced to buy products such as mortgages in their own Member State because the obstacles are too great to shop around in other Member States.
“The Commission estimates that more market convergence on mortgage interest rates could bring about savings up to €63 billion per year for consumers all across the EU.”