On the 28th of May, DG FISMA of the European Commission held the first roundtable dialogue between EU representatives of banks, non-bank lenders and insurers with consumers and business stakeholders to discuss practical relief measures taken by the financial sector to alleviate the impact of the coronavirus crisis on consumers and businesses, and a feedback from consumers and businesses about the availability and adequacy of these measures. COFACE-Families Europe was invited to present its views from a consumer perspective along with other key consumer stakeholders.
During the meeting, both Vice-President Valdis Dombrovskis and Commissioner Didier Reynders underlined the crucial role that the financial sector has in continuing to finance the economy in order to avoid a severe economic recession, but also the risks that consumers and businesses face such as over-indebtedness, financial exclusion, risk of losing insurance coverage in case they can no longer pay the premium and many more. Both European Commissioners also acknowledged the increasing financial strain that has been placed on households with more and more of them having difficulties in making ends meet, which makes relief measures such as moratoria on credit repayments even more important.
COFACE-Families Europe insisted on several points:
- While we welcome the initiative taken by the European Commission to initiate this dialogue, we are a bit disappointed that this roundtable comes this late, as it was 2 months ago that the recommendations that consumer representatives have put forward would have been most useful, as opposed to ask consumer representatives to evaluate measures already put in place during the confinement at a time where most countries are easing confinement measures.
- Families have indeed faced many financial difficulties in the last few months. While we welcome measures from the financial sector, other measures such as freezing or lowering rent payments, would have also been useful, since rent is one of the largest expenditure of households. We recognize that this is beyond the scope of what the financial sector can do, but it is important to underline the gaps in the current relief efforts.
- We hope that increasing private debt (individual families borrowing more money) will not be the main strategy used to jump start the economy, as that would mean transferring all the risk to consumers/small businesses. Other policy options should be considered as well, such as monetary policy and fiscal policy.
- While we understand the need for a structured dialogue limited in scope, we ask where more long term issues and macro-economic issues can be discussed, given how narrow the roundtable topics are.
COFACE-Families Europe will continue monitoring closely the impact of the coronavirus crisis and reflect on policy measures, in cooperation with other key stakeholders, which can best alleviate families.
For more information about the event, please contact Martin Schmalzried: email@example.com