Even though the European Union’s further political integration may have come unstuck with the rejection of the proposed European Consitution by voters in France and the Netherlands (See IJ Website May 30 and June 2), the leaders of some Germany’s largest financial organizations are forging ahead with proposals for further economic integration in insurance and financial services.
Coming together as the Initiative Finanzstandort Deutschland (IFD), the group includes the German lnsurance Association, Allianz and Munich Re. They have proposed that their work be used as an outline for the further integration of European financial markets.
The plan suggests using the “efficient payment systems in Germany as a model for pan-European systems,” and calls for “financial market integration based on fair competitive conditions”
The IFD was set up in May 2003 as an action group bringing together institutions from all sectors of the German banking industry, insurance companies, Deutsche Bank, the Bundesbank, the Federal Ministry of Finance and the central associations of the German financial sector. Its aim is to develop specific market-related measures and products that benefit clients and companies. The IFD also contributes to the political discussion with decision-makers at various levels.
German government representatives, bankers and insurance execs presented the plan at a reception for European MP’s and high-level European Commission staff in Brussels. They outlined some of the details they see as necessary for further financial market integration in Europe.
Deutsche Bank Chairman Josef Ackermann noted: “Especially after the most recent setbacks on ratification of the European constitution, we feel it is essential to press ahead with the work on a single market for financial services. An integrated market for financial services based on fair competitive conditions brings benefits for companies and consumers. It makes Europe positively ‘experiencable’.”
The IFD proposals consider “financial market integration in Europe as a source of considerable growth potential from which national economies in particular can benefit and believes that Germany can play a leading role in shaping the single financial market.”
The bulletin noted that the “German financial sector has made great progress in meeting the challenges of the past few years and is now back on a growth path. This is shown by the IFD’s Financial Market Report, a comprehensive analysis of Germany as a financial center, presented by the IFD economists in Frankfurt on 13 June 2005 (available at: www.finanzstandort.de).”
The IFD has drafted the “guiding principles for regulation of the single financial market,” which it notes is already a “major contribution to the ongoing development of the required legal framework. It believes that further potential can be realized in the European financial sector by taking well-directed steps to create equal market access boosting competition.”
The bulletin also points out that because of the size of the German national economy, the largest in the EU, “the modern technical infrastructure and the highly qualified workforce, the German financial sector is ideally placed to help shape new standards in Europe. Particularly in the payments sector, clients benefit from its highly efficient, low-cost processes.”
The reception for European MP’s and Commission staff is designed to follow up the discussion with Internal Market Commissioner Charlie McCreevy, who visited the IFD in Frankfurt last December. The bulletin said, “both sides are keen to continue the dialogue in the future.”
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