The other answer to the crisis: Europe must deliver on concrete solutions for excluded citizens

Why the EU should not loose any more time to ensure access to basic bank services for all

Can you imagine a bank refusing to open you a bank account? Well, probably you can’t and so can’t the vast majority of consumers living in the European Union. Nevertheless, millions of EU citizens have actually seen banks refusing to accept them as their costumers. Others do not even dare to ask for the opening of an account.

European Commission has provided Members States and co-legislators with detailed evidence on the topic. Since 2009, the Commission has consulted three times Member States and stakeholders. Both Commission and Parliament have hosted several hearings, they have ordered studies and impact assessments and almost anybody in European instutions working on the topic does finally agree that individual access to a bank account must be guaranteed to any consumer living in the European Union.

While awareness has been successfully raised, we have, at the same time, lost more than three years to act and to prevent banks from excluding people from a basic and everyday service. Therefore, last July, an overwhelming majority of 585 against only 68 MEPs have called upon the Commission to prioritize the needs of excluded people and to come forward with a legislative intiative on access to basic bank accounts by January 2013.

In the upcoming year, we will continue to see a big number of Member States – ordinary people as well as financial institutes – struggling against the effects of the crisis. Considerable work has already been done in the fight against the crisis and we have seen the ECB, the Commission, European as well as national parliaments activating billions of EURO and delivering on all sorts of reforms at the shortest delays.

Still, the Employment and Social Development Report recently published by the European Commission proves that poverty and social disparities in Europe are on the rise. Evidence increasingly shows that the Union is entering a social crisis for real. There is some reason to question if the Union has chosen the right approach to solve its economic crisis.

Access to bank accounts is a problem highly linked to poverty, social exclusion as well as to rural development. It is, in a large part, people experiencing problems of overindebtedness who see themselves denied standard payment services. While in Ireland and Spain, it is common knowledge that behind the banking crisis, you have millions of consumers not being able to pay back their mortages, it is hard to conceive the little EU leaders seem to care on the fight against overindebtedness and on concrete solutions to help those people back to a normal life.

Several years ago, a Commission survey has estimated 30 million the number of EU citizens excluded from banking services. Taking into account the harsh effects of the crisis, these numbers are certainly outdated and rather modest. Current figures provided by national consumer debt advice organizations tell us that, in Greece, one of five consumers is more than three months behind on mortage payments. Among these are dismissed employees, precarious micro-entrepreneurs as well as civil servants and retired people suddenly confronted with delicate cuts in wages or pensions.

We are seeing well educated middle-class people confronted with social humiliations that they have not been prepared for. And we also see thousands of young Portuguese, Irish or Greek looking leaving their countries in the hope for a better perspective in Germany, Austria or England – Member States that, by the way, have still not implemented any legal right to open a bank account.

For sure, the answer to the European social crisis must be multi-folded. Establishing a Union wide guarantee to hold a payments account can only be one intrument among many others to establish inclusive social economies. It would be though a relatively simple as well as affordable measure that could quickly and effectively open a door to proper housing, to energy and communication services as well as to the reintegration to the regular labour market or education.

When it comes to access to basic payment services, policy makers should bear in mind that banks have a responsibility towards society that they should actually serve. If Europe does not want the internal market to be left uncompleted, informal economy to broaden, social regression to become a persistent trend and citizens to lose faith in the European project, then we need to focus on both the small and the ambitious measures that can develop a truely inclusive economy and prevent Europeans to face a lost decade.