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. Last Updated: 07/27/2016

High Transfer Fees Flaunt Euro Zone's Raison d'Etre




BRUSSELS, Belgium -- European consumers are paying often huge fees for transferring money across European borders, despite the advent of the euro, according to a European Commission study released Tuesday.


The study found that the average fee for transferring 100 euros ($90.99) between two countries in the euro zone was 17.10 euros. In one case, an investigator paid a mammoth 46.76 euros fee to move the money from an account in Italy to one in neighboring Austria.


Cross-border transfers remain far more expensive than domestic transactions even though the introduction of the euro has removed all exchange-rate risk, the study concluded.


The Commission described the findings as "disturbing," saying the high fees made a mockery of the EU's single currency and efforts to create a single market for goods and services.


It said widespread double-charging - where fees are paid by both the person sending the money and the person receiving it - was in breach of EU law and warned governments they could be sued unless the practice stopped.


"If the results of this survey are confirmed, the Commission may decide to open infringement procedures against member states for incorrect application of the cross-border transfers directive," it said in a statement.


The European Interregional Institute for Consumer Affairs sent four investigators on behalf of the Commission to each of the 11 euro-zone countries in November and December 1999.


They set about sending 100 euros from country to country by bank transfer and compared the fees charged with the cost of withdrawing money from ATMs in neighboring countries, exchanging that money in banks and bureaux de change, and buying goods using credit cards.


The results showed a huge discrepancy from country to country, between different banks in the same country and even between transactions going in different directions between the same two banks.


The survey found the cheapest transaction was 1.98 euros charged by a Luxembourg bank to send money to France. The most expensive was a 46.76 euros fee for a payment from Italy to Austria.


Transfers from Ireland to Italy cost 43 percent more on average than transfers from Finland to Ireland, the study found.


Despite recent legislation banning double-charging and requiring fees to be levied on the person making the payment, payees were charged in a quarter of all cases, and in 50 percent of cases in Austria and Spain.


The study found that charges were much lower for withdrawing cash with bank cards and changing banknotes. Bureaux de change charged more than twice as much than banks for changing notes.


The Commission pledged to increase the pressure on EU governments to force banks to lower their charges, but stressed it was not its job to impose standard charging systems on commercial banks.


The Commission will meet government representatives on June 22 to discuss ways around the problem.


Separately, the Commission is already preparing legal proceedings against a number of banks suspected of fixing fees for exchanging euro-zone banknotes.