| Author (Person) | McLauchlin, Anna |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.12, No.6, 16.2.06 |
| Publication Date | 16/02/2006 |
| Content Type | News |
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By Anna McLauchlin Date: 16/02/06 Germany wants to streamline legal rules for making debit or credit payments anywhere in the EU. The New Legal Framework (NLF), proposed by the European Commission in December, lays down market access requirements and prudential rules for both banks and other debit payment providers who operating in Europe, such as eBay's PayPal. It also dictates the information such providers must give to their customers, consumer rights and how direct debit schemes should work. A first exchange of views is expected in the European Parliament on 13 March and the first report in mid-April. But Germany has already sent the Austrian presidency of the EU significant proposals to change the text. Berlin wants to take out the first part of the proposal and deal with it in a separate piece of legislation. This would leave the NLF dealing only with information requirements and consumer rules. Since discussions began on creating a single payment area for the EU (SEPA), banks have argued against having the same rules of market access for non-banking payment institutions. They claim that it is unfair that such providers should be treated in the same way as banks when the latter have to follow strict risk capital rules. Sources say Berlin supports the banks' position and thinks that concentrating the NLF on the less controversial aspect of the payment system is more likely to win agreement from both governments and MEPs in just one reading, expected in July or September. If it goes into a second reading, this would delay adoption by several months at least. This could, in turn, jeopardise the chances of banks achieving their own self-imposed deadline of 2008 for a pan-eurozone debit system, as they want to ensure that their scheme is in line with EU rules. Germany has the backing of both Italy and France, but the UK and the Netherlands have opposed Berlin's approach. The next working group meeting will take place on 16 March. The necessity for banks to meet their deadlines was underlined by Charlie McCreevy, the internal market commissioner, who this week again threatened regulatory action to speed up the process if swifter progress was not made by the European Payments Council. The EPC is composed of European banks working towards creating SEPA. The NLF sets out the legal framework for building SEPA, but it does not tell banks how to do it. Further regulation might set stricter deadlines or impose technical standards for debits. The banks have agreed their own framework for meeting the deadline of 2008 for a pan-eurozone payment system, and of 2010 for the entire EU. But in a policy paper published this week, the Commission says that there is a "severe risk" that the financial cost of meeting these standards will discourage banks from doing so. "Plans for mass and irreversible migration of users from current domestic schemes to SEPA products by 2010 are vague," the paper says. Sandra Quinn from the UK payments association APACS said: "We would always prefer self-regulation to regulation, but this is clearly a case where the markets are in a better position to deliver the best solution. It may not be as quick as some people hoped for but there is solid appetite for the EPC agenda." Article reports on an initiative by the German Government to streamline legal rules for making debit or credit payments anywhere in the EU. The German proposal would separate rules of market access for non-banking payment institutions from those for banks. The Commission had presented its proposals for the 'New Legal Framework' in December 2005. |
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| Source Link | http://www.european-voice.com/ |
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| Subject Categories | Business and Industry, Internal Markets |
| Countries / Regions | Europe, Germany |
