France pushes hard for dealon financial services rules

Date: 05/10/00

By Renée Cordes

FRANCE has tabled a compromise plan designed to clinch a deal by the end of its presidency on Union-wide rules to govern the sale of financial services over the phone, by mail or online.

The new proposal, which is being discussed by member state experts, suggests that an extensive list should be drawn up of the types of information which financial service providers must give consumers before a contract is signed.

French diplomats hope that getting agreement on this will pave the way for an accord at this month's meeting of EU finance ministers.

But some Union diplomats doubt that their approach will work, given governments' determination to strike a balance between protecting consumers and making it easier for the financial services industry to do business across borders.

"The French strategy is that if member states are able to add their favourites to the list, then everyone will be happy," said one. "It will be difficult for the presidency to convince governments to come around to this solution."

The proposal aims to harmonise national laws governing 'distance selling' of financial services to encourage firms to use the single market, and ensure that consumers' rights are protected.

The Commission came forward with its first proposal nearly two years ago, then produced a second version last year after criticism of the initial plan. Under the latest proposal, firms using distance-selling techniques would be allowed to operate in all 15 member states as long as they complied with key consumer protection requirements, including detailed rules on access to information.

Luxembourg, France, the UK and the Netherlands initially welcomed the EU executive's harmonisation approach, but other member states insist that they should be allowed to go beyond the provisions of Union-wide legislation and impose additional requirements on firms.

France has tabled a compromise plan designed to clinch a deal by the end of its presidency on Union-wide rules to govern the sale of financial services over the phone, by mail or online.