Magazine article European Social Policy

Social Housing : France Must Open Savings Schemes to All Banks

Magazine article European Social Policy

Social Housing : France Must Open Savings Schemes to All Banks

Article excerpt

Following a year-long investigation, the European Commission, on 10 May, ordered the French government to open up its savings book schemes known as Livret A' and Livret bleu'. France has nine months in which to amend its legislation to allow all banks operating in France (whether of French or other origin) to operate the schemes. The government may still apply the special conditions currently attached to the Livrets schemes to any bank that wishes to offer the service.

Originally created in the 1800s, the schemes have historically worked as follows. The French government granted exclusive rights to three French banks - the Banque Postale, Caisses d'Epargne and the Credit Mutuela- to distribute the two types of savings book. The banks get a fee for running the schemes and pass the monies collected (some 128 billion) to the Caisse des Depots et Consignations, which then uses them to finance social housing. Some 50 million French citizens make use of the products, which also benefit from a tax exemption. For the French government (and this is accepted by the Commission) the schemes constitute services of general economic interest as they contribute to public housing and provide basic banking services to many financially unsophisticated consumers.

The Commission stressed that it had no problem with the schemes themselves - "they are very good products," said a spokesperson for Commissioner Neelie Kroes. But, if clients are attracted to these three banks because they can offer these savings products, it gives them an advantage over their competitors. …

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