Euro, transfers, savings: Europe is changing the way its inhabitants use their money

Euro, transfers, savings: Europe is changing the way its inhabitants use their money
Euro, transfers, savings: Europe is changing the way its inhabitants use their money

Pay in euros, make transfers at no extra cost, invest anywhere in the European Union… Europe has changed the way its inhabitants use their money, but not all projects have yet been completed. Overview, one month before the European elections.

It is the most concrete materialization of European cooperation for the 350 million inhabitants of the 20 countries of the euro zone: the euro replaced two decades ago the Deutsche Mark, the franc, the peseta or the lira in the wallets of Europeans, who have gradually adopted it. “The common currency is simple and more pleasant, declares this 72-year-old German retiree.”

Germany was, however, one of the countries where the euro had difficulty gaining acceptance, notably because of the feeling that its arrival had been accompanied by a rise in prices: the Germans had nicknamed it the ” teuro”, a play on words associating euro and “teuer”, “expensive” in German. At the start of the 2010s, the debt problems in several euro zone countries (Greece, Italy, Ireland, Portugal) also put a strain on solidarity between States, with the risk of currency implosion. But since then, the criticism has been less.

In the fall of 2023, 79% of euro users said they were in favor of the currency, according to the Standard Eurobarometer conducted by the European Commission. And if we talk about the cost of living in the euro zone again over the last two years, inflation there is “more linked to the Russian war” in Ukraine and “to energy prices”, estimates Mathias Fechter, 61 years, independent consultant in Frankfurt. Whether for tourism or business, paying with a bank card in another country of the European Union has been free of charge since 2018, even if conversion fees may still apply for payments in a currency other than the euro. No more surcharges for direct debits and bank transfers within the Single Euro Payments Area (or Sepa). Established in 2014, it unified payment systems between 34 countries (those of the EU but also the United Kingdom and Switzerland) and generalized the use of BIC and IBAN. By fall 2025, the absence of additional fees will be extended to instant transfers. But checks still do not cross borders free of charge.

Tomorrow, will it be possible to invest your savings with the same rules throughout Europe?
Under pressure from Brussels, certain national placements have already expanded, such as the French Stock Savings Plan (PEA) which, since 2002, is no longer limited to only the country’s companies but concerns all European companies.

Taxation is also simplified, with taxation only based on country of residence. But France is now pushing for the creation of a new product accessible with the same rules and the same taxation for all countries, and allowing better use of the savings of European citizens to finance businesses on the continent. This would be part of the “Capital Markets Union”, a project launched in 2015 but since bogged down in differences between member countries over its terms of application. Paris is trying to relaunch the idea during the European campaign, and some politicians are also talking about it on the other side of the Rhine, but the subject is not really unanimous.

Launched in 2022, the pan-European individual retirement savings product (PEPP), which complements national products, has not found its audience: barely eight offers in four countries (Poland, Croatia, Czech Republic, Slovakia) are listed in the European online database. The Europeans have also still not managed to agree to jointly guarantee at European level the guarantee of bank deposits up to 100,000 euros.

This mechanism protects consumers’ savings if a bank is in difficulty (it can also avoid a bank failure by discouraging customers from rushing to withdraw their savings since they are protected). But if the ceiling is the same everywhere in the EU, the guarantee remains applied at national level.

Sami Nemli With Agency / ECO Inspirations



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