Skip to content. | Skip to navigation

Personal tools
You are here: Home topics Finance Finance Guides
Document Actions

Finance Guides

Up one level
Guides on the EU policy on Finance.
Consumer protection in financial services - Insurance Mediation Directive (IMD) Revision
The European Commission has presented a legislative package that raises standards in financial services and removes loopholes for the benefit of consumers. Specifically, the package proposes new, consumer-friendly standards for information about investments, raises standards for advice, and tightens certain rules on investment funds to ensure their safety. The Commission is proposing a revision of the IMD, which currently regulates selling practices for all insurance products, from general insurance products such as motor and household insurance to those containing investment elements. Consumers are often not aware of the risks associated with the purchase of insurance cover. Whilst accurate professional advice is crucial for insurance sales, recent surveys1 show that more than 70% of insurance products are sold without appropriate advice. The current EU legislation does not deal in detail with the sale of insurance products, rules differ across Member States, and apply solely to intermediaries. The goal of the Commission's proposal is to upgrade consumer protection in the insurance sector by creating common standards across insurance sales and ensuring proper advice. It will do so by improving transparency and establishing a level playing field for insurance sales by intermediaries and sales by insurance undertakings. To achieve this, the following changes are proposed: The same level of consumer protection will apply, regardless of the channel through which consumers purchase an insurance product. Whether a consumer purchases a product directly from an insurance undertaking or indirectly from an intermediary (e.g. an agent or a broker), the consumer will receive the same level of protection. This does not exist today as the current IMD only covers sales provided by intermediaries. Consumers will be provided in advance with clear information about the professional status of the person selling the insurance product. Rules will be introduced to address more effectively the risks of conflict of interest, including disclosure of the remuneration received by sellers of insurance products. Insurance product sales will have to be accompanied by honest, professional advice. It will be easier for intermediaries to operate cross-border, thus promoting the emergence of a real internal market in insurance services.
Consumer protection in financial services - Packaged retail investment products (PRIPS)
The European Commission has presented a legislative package that raises standards in financial services and removes loopholes for the benefit of consumers. Specifically, the package proposes new, consumer-friendly standards for information about investments, raises standards for advice, and tightens certain rules on investment funds to ensure their safety. The Commission's PRIPS proposal improves the quality of information that is provided to consumers when considering investments. Investment products are complex and it can be difficult to compare them or fully grasp the risks involved. The consequences of taking unexpected risks and facing consequent losses can be devastating for consumers, given that investments often form the backbone of a consumer's life savings. Given an EU retail investment market of up to 10 trillion euro, buying wrong or unsuitable products can quickly become a major problem. The Commission proposal aims to inform consumers in a format easy to understand by introducing a new, innovative standard for product information, one that is short and plain-speaking, and thus far more consumer-friendly. This document is called the 'Key Information Document' (KID). The proposal foresees that every manufacturer of investment products (e.g. investment fund managers, insurers, banks) will have to produce such a document for each investment product. Each KID will provide information on the product's main features, as well as the risks and costs associated with the investment in that product. Information on risks will be as straight-forward and comparable as possible, without over-simplifying often complex products. The KID will make clear to every consumer whether or not they could lose money with a certain product and how complex the product is. The KIDs will follow a common standard as regards structure, content, and presentation. In this way, consumers will be able to use the document to compare different investment products and ultimately choose the product that best suits their needs. The products for which a KID will be required include all types of investment funds, insurance-based investments and retail structured products, in addition to private pensions.
Tackling tax fraud and evasion in the EU - guide
Minimum sanctions for tax crimes, a cross-border tax identification number, an EU tax-payer's charter and stronger common measures against tax havens. These are some of the concrete ideas that the European Commission has put forward today to improve the fight against tax fraud and evasion in the EU. Taking a holistic approach, the EC Communication looks at ways to strengthen current measures and sets out possible new initiatives for eliminating fraud and evasion in Europe.
Better governance for the Single Market - guide
The European Commission is proposing to focus efforts on sectors with the largest growth potential. In 2012-2013, the sectors identified are services and network industries. In these areas, the Commission calls on EU Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission, for its part, says it will provide enhanced transposition assistance in order to smooth out potential problems. In case of infringements, procedures should take no more than 18 months on average (currently 25.5 months) and Member States should comply with Court rulings within 12 months. To make the Single Market work more effectively, the Commission recommends making better use of IT tools to empower citizens and businesses. It calls on Member States to strengthen problem-solving tools and set up Single Market Centres to better monitor how Single Market rules work.
Excessive Deficit Procedure recommendations on Bulgaria, Germany and Hungary - guide
Along with the country-specific recommendations and the conclusions of the in-depth reviews, the European Commission is today also making three proposals to the Council related to the Excessive Deficit Procedure (EDP). Firstly, the Commission is recommending that the Council abrogate the EDP for Bulgaria and Germany, as foreseen in Article 126(12) of the Treaty. In March, Bulgaria and Germany notified that their 2011 general government deficit was below 3% of GDP. Following the validation of these figures by Eurostat on 23 April 2012, and also taking into account that the Commission's 2012 spring forecast shows that these deficits will remain durably below 3% of GDP, the Commission has concluded that the correction of their excessive deficits is ensured. Secondly, the Commission has adopted a proposal for a Council decision to lift the suspension of commitments from the Cohesion Fund for Hungary, after concluding that the country has taken the necessary action to correct its excessive deficit, in line with the Council Recommendation of 13 March 2012. More specifically, the Commission has concluded in its assessment that the 2012 budget deficit target of 2.5% of GDP is expected to be reached and the 2013 budget deficit is expected to be well below the 3% of GDP reference value, despite the slight weakening of the macroeconomic environment, as indicated by the Commission in its 2012 spring forecast. The Commission will continue to closely monitor budgetary developments in Hungary, in accordance with the Stability and Growth Pact.
Conclusion of 12 in-depth reviews - correcting macroeconomic imbalances
The in-depth reviews are part of the Macroeconomic Imbalance Procedure, which was introduced to prevent and correct macroeconomic imbalances and which is being implemented for the first time this year. They cover twelve EU Member States, which were identified in the Alert Mechanism Report of 14 February 2012 as warranting further economic analysis in order to determine whether macroeconomic imbalances exist or risk emerging. These Member States are Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Italy, Hungary, Slovenia, Spain, Sweden and the United Kingdom. Each of the twelve in-depth reviews examines the origin, nature and severity of possible macroeconomic imbalances. They assess whether the country is affected by an imbalance or not, and if it is, what the nature of the imbalance is. The reviews confirm that the twelve Member States concerned face macroeconomic imbalances which need to be corrected and closely monitored. They also conclude that the adjustment of economic imbalances is broadly proceeding, as reflected in reductions in current account deficits, convergence in unit labour costs, retrenchment in credit flows or corrections in housing prices. However, in some cases it is not clear to what extent the adjustment is complete and durable, or whether the speed of adjustment is adequate. In many cases, the accumulated internal and external imbalances continue to pose a formidable challenge, for example with regard to private and public sector indebtedness.
2012 country-specific recommendations in the context of the European Semester - guide
The country-specific recommendations put forward by the European Commission today give operational guidance for EU Member States while preparing their budgetary policies and for economic reforms that should be enacted over the coming twelve months to boost competitiveness and facilitate job creation. The adoption of the recommendations marks the concluding phase of the European Semester of economic policy coordination, launched with the Commission’s Annual Growth Survey on 23 November 2011. They should be endorsed by the European Council on 28-29 June and formally adopted by the Council in July. The basis for these recommendations is a thorough assessment of the implementation of those adopted last year, combined with a detailed analysis of the national reform programmes and stability or convergence programmes1 that Member States submitted by 30 April 2012. The analysis underpinning the recommendations is presented in 28 staff working documents (again, one for each Member State and one for the euro area). For the first time this year, the recommendations also reflect the findings of the twelve in-depth reviews carried out in the context of the Macroeconomic Imbalances Procedure. The recommendations cover a wide range of issues including public finances and structural reforms in areas such as taxation, pensions, public administration, services, and labour market issues, especially youth unemployment. The programme countries (Greece, Portugal, Ireland and Romania) receive only one recommendation: to implement the measures agreed under their programme.
Fiscal Compact - The EU's new budgetary 'golden rules'
The EU fiscal pact -- a German demand as the price of financial solidarity with debt-laden, recession-hit eurozone partners -- introduces "golden rules" making balanced budgets mandatory. Here are the main points:
EU-EIB Project Bonds Initiative - guide
The European Commission, Parliament and Council have agreed on a proposal for a pilot phase of Project Bonds. The Project Bond Initiative by the EU and the European Investment Bank will support the financing of commercially viable infrastructure projects in the area of transport, energy and communications infrastructure. The main objective is to attract debt capital market financing at a time when these projects are heavily dependent on bank lending, which is hardly available with long-term maturities.
European Commission report on the application of the Third Anti-Money Laundering Directive - guide
In light of the recent adoption of revised international standards and of the European Commission's own review process, a report on the application of the Third Anti-Money Laundering Directive was adopted by the Commission on 11 April. The Report analyses how the different elements of the existing framework have been applied and considers how the framework may need to be changed. It contains an examination of the provisions of the Directive, and in general concludes that although the existing framework appears to work well and that no fundamental shortcomings have been identified which would require substantial changes, some modifications are necessary to adapt to the evolving threats posed. The Commission plans to bring forward a proposal for a fourth anti-money laundering Directive in autumn 2012.
Regulation on Over-the-Counter Derivatives and Market infrastructures - guide
EU legislation to make trade over-the-counter (OTC) derivatives safer and more transparent was approved by an overwhelming majority in Parliament on 29 March. Derivatives trading is widely believed to have contributed to the global financial crisis. The draft regulation had been provisionally agreed by Parliament and Council negotiators on 9 February.
Task Force for Greece second quarterly report - guide
The European Commission's Task Force for Greece has presented its second report on the EU support to Greece. It was created to help Greece implement its challenging reform agenda, which is designed to return to growth and create jobs. The Task Force was set up by by EC President Barroso in July 2011. This second report describes progress made in accelerating Greece's absorption capacity of EU funds (above EU average) and in setting up and implementing technical assistance (TA) to Greece in nine key areas with the support of around twenty Member States, the Commission and the IMF.
Commission proposal on improving securities settlement in the EU and on Central Securities Depositaries - guide
As part of its ongoing efforts to create a sounder financial system, the European Commission has proposed to set up a European common regulatory framework for the institutions responsible for securities settlement, called Central Securities Depositories (CSDs). The proposal, it says, will bring more safety and efficiency to securities settlement in Europe. It also seeks to shorten the time it takes for securities settlement and to minimise settlement fails.
The economic crisis and pensions in the EU
The EU has put forward a range of plans for adequate, safe and sustainable pensions. How does the economic crisis affect the pensions situation in the European Union?
Alert Mechanism Report on macroeconomic imbalances in EU Member States - guide
The EU’s new rules on economic governance, the so-called "six-pack" has two legs: fiscal and macroeconomic surveillance. The macroeconomic imbalances procedure is a new tool that helps detect and correct risky economic developments. Its first ever annual Alert Mechanism Report (AMR), adopted today, kicks-off the surveillance. The European Commission identifies 12 EU Member States whose macroeconomic situation needs to be analysed in more depth. It is only these subsequent in-depth reviews that will assess whether or not imbalances exist and whether or not they are harmful.
Easier access to EU funds - guide
Since the presentation of its proposal for the next multi-annual financial framework (MFF) last June, the European Commission has proposed over 120 changes to simplify the rules governing EU funding for Small and Medium Enterprises, towns and regions, students, scientists and others. Today's communication "A simplification agenda for the 2014-2020 MFF" brings them altogether in one single document. The key question now is whether the European Parliament and the Member States are ready to make the life of EU funds' beneficiaries easier by reducing the administrative burden on them.
Treaty on Stability, Coordination and Governance in the Economic and Monetary Union - guide
At the informal summit on 30 January a new Treaty on Stability, Coordination and Governance in the Economic and Monetary Union was finalised by all EU Member States with the exception of the United Kingdom and the Czech Republic. The Treaty aims to strengthen fiscal discipline through the introduction of more automatic sanctions and stricter surveillance, and in particular through the "balanced budget rule".
Commission prohibits proposed merger between Deutsche Börse AG and NYSE Euronext - guide
The European Commission has prohibited, on the basis of the EU Merger Regulation, the proposed merger between Deutsche Börse and NYSE Euronext, as it would have resulted in a quasi-monopoly in the area of European financial derivatives traded globally on exchanges. Together, the two exchanges control more than 90% of global trade in these products. The Commission says its investigation showed that new competitors would be unlikely to enter the market successfully enough to pose a credible competitive threat to the merged company. The companies offered, in particular, to sell certain assets and to provide access to their clearinghouse for some categories of new contracts, but overall, the commitments were inadequate to solve the identified competition concerns.
Consumer credit websites - EC investigation - guide
Were you ever about to sign a contract for a personal loan, credit card, or other consumer credit and discovered that it was all working out more expensive than you had first expected? An EU-wide investigation of websites offering consumer credit took place to check whether consumers are receiving the information to which they are entitled under EU consumer law before signing a consumer credit contract. National enforcement authorities checked more than 500 websites across the 27 Member States plus Norway and Iceland. They flagged 70% (393) of sites for further investigation in relation to the following main problems: the advertising did not include the required standard information; the offers omitted key information that is essential for making a decision; the costs were presented in a misleading way. National enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. The sweep operation checked in particular how business is applying the Consumer Credit Directive (recently transposed in Member States), which aims to make it easier for consumers to understand and compare credit offers.
Communication on e-commerce - guide
The European Commission has adopted a Communication presenting 16 targeted initiatives aimed at doubling the share of e-commerce in retail sales (currently 3.4 %) and that of the Internet sector in European GDP (currently less than 3 %) by 2015.