The Government's campaign to persuade consumers and companies to use the euro in day-to-day transactions is set to be dealt a major blow by an EU report which shows that the average bank cost of a credit transfer of €100 from Ireland is a staggering €25.61, the worst in the euro-11.
An as yet unpublished survey conducted by the consumer affairs directorate of the Commission in the 11 states found the average cost of the same credit transfer to be €15.51, and the cheapest, from Luxembourg, €8.15. The size of transfers has been deliberately pitched low to reflect individual rather than business spending. Costs on transfers of larger sums are smaller.
An Irish Bankers' Federation spokesman declined last night to comment on the report before its publication today. "I am particularly annoyed that there is a report doing the rounds and we haven't seen it yet," he said.
The directorate, headed by the Irish commissioner, Mr David Byrne, is understood to be involved in talks with the Internal Market Commissioner, Mr Frits Bolkestein, about possible legal action. Mr Byrne said last night that he was very surprised by the high level of charges on credit transfers in euros, particularly given that there is no currency risk in the euro zone.
He called on the banks to urgently review their charging policies so that consumers can get a fair deal.
And the figures cited do not include any of the charges paid by the beneficiary of the transfer - although Irish banks, alone of the 11, do not charge beneficiaries on incoming cash, credit transfers sent abroad by them may be hit twice, putting up the total cost of some Irish €100 transfers to €30.47 in both Spain and Finland.
The highest average total cost of the same transfer, including the charge to the beneficiary, was from Portugal (€29.68). At the extreme of double charging, the survey found, were some transfers from Portugal to Austria (€40.09), Italy to Austria (€46.76), and Portugal to Spain (€36.65). The survey found the practice of charging beneficiaries most prevalent in Austria and Spain, where 50 per cent of incoming transactions incurred charges.
Ireland performed relatively well in terms of the 3.24 days average time taken by the transfer to get to its destination, with 63 per cent taking three days. Germany performed worst with an average of 4.19 days. Ireland was a bit slower in receiving cash with 15 per cent of payments taking four days and the same proportion, five days.
Withdrawals from cash dispensers of the rough equivalent of €100 in national denominations produced a range of charges from 1.74 per cent (Ireland) to 5.89 per cent (Italy).
The survey found that the cost of exchanging a similar sum in banknotes in a bank varied from 1.2 per cent (Portugal) to 7.8 (France) with Ireland at 2.88 per cent. In bureau de change (on exchanges of banknote of around €50) the percentage charges ranged from 2 per cent in Portugal to 13 per cent in France (Ireland - 6.14 per cent).
