Work
07.May 2007 - 00:00
Free movement of workers and equal access to banking services
Free movement of workers is one of the main rights that the Union enables its citizens to enjoy. Younger job-hunters in particular are happy to seek work abroad. The EU as a whole is regarded as an employment area, and in principle free movement of workers is guaranteed. However, many practical problems are continuing to hamstring the wider European labour market and even pose an obstacle to freedom of movement.
Young people are willing to look for work in neighbouring countries and further afield. It is not unusual for the two halves of a couple each to work in different countries while living together in a third country. These living and working arrangements, however, can come to grief because of the terms on which banks grant home loans. For example, a Belgian man working for a British firm and, as he spends more than 183 days in the United Kingdom, liable to pay British tax could not get a home loan from Finnish banks in spite of having a 30 % down payment to offer and producing evidence of his British earnings. The banks, on the other hand, require borrowers to have a Finnish social security number, as they would if they worked in Finland. The man has been living in Oulu with his Finnish wife and his 1-year-old son and, even after the couple’s regrettable divorce, would like to go on living in Finland. Because he has been refused a loan, he will not be able to buy a house or flat in Finland, and the father-son relationship will thus be curtailed.
The banks’ guidelines also mean that a Finn working in Sweden but living in Finland cannot get a home loan from a Finnish bank, a lending practice which likewise does little to promote free movement of workers.
Is the Commission aware of the banks’ lending practices regarding home loans? Has it considered taking steps to improve the situation? How could equal access to banking services be fostered so as to safeguard free movement of workers?
Answer given by Mr McCreevy on behalf of the Commission
The Commission is aware of the practical difficulties faced by EU citizens trying to obtain a home loan in certain cross-border situations, and is aware of the banking practices described by the Honourable Member. These practices may have various grounds: commercial, regulatory, fiscal or otherwise.
The Commission wishes to facilitate, for the benefit of both mortgage lenders and borrowers, the circulation of home loans in the EU. It has, therefore, initiated, since 2003, a thorough review of the barriers faced by lenders and borrowers seeking to grant and to obtain a loan on a cross-border basis. The Commission will, later in 2007, issue a White Paper presenting the policy orientations in this field.
Further information on the review of the barriers to cross-border activity can be obtained at:
http://ec.europa.eu/internal_market/finservices-retail/home-loans/integration_en.htm
Free movement of workers is one of the main rights that the Union enables its citizens to enjoy. Younger job-hunters in particular are happy to seek work abroad. The EU as a whole is regarded as an employment area, and in principle free movement of workers is guaranteed. However, many practical problems are continuing to hamstring the wider European labour market and even pose an obstacle to freedom of movement.
Young people are willing to look for work in neighbouring countries and further afield. It is not unusual for the two halves of a couple each to work in different countries while living together in a third country. These living and working arrangements, however, can come to grief because of the terms on which banks grant home loans. For example, a Belgian man working for a British firm and, as he spends more than 183 days in the United Kingdom, liable to pay British tax could not get a home loan from Finnish banks in spite of having a 30 % down payment to offer and producing evidence of his British earnings. The banks, on the other hand, require borrowers to have a Finnish social security number, as they would if they worked in Finland. The man has been living in Oulu with his Finnish wife and his 1-year-old son and, even after the couple’s regrettable divorce, would like to go on living in Finland. Because he has been refused a loan, he will not be able to buy a house or flat in Finland, and the father-son relationship will thus be curtailed.
The banks’ guidelines also mean that a Finn working in Sweden but living in Finland cannot get a home loan from a Finnish bank, a lending practice which likewise does little to promote free movement of workers.
Is the Commission aware of the banks’ lending practices regarding home loans? Has it considered taking steps to improve the situation? How could equal access to banking services be fostered so as to safeguard free movement of workers?
Answer given by Mr McCreevy on behalf of the Commission
The Commission is aware of the practical difficulties faced by EU citizens trying to obtain a home loan in certain cross-border situations, and is aware of the banking practices described by the Honourable Member. These practices may have various grounds: commercial, regulatory, fiscal or otherwise.
The Commission wishes to facilitate, for the benefit of both mortgage lenders and borrowers, the circulation of home loans in the EU. It has, therefore, initiated, since 2003, a thorough review of the barriers faced by lenders and borrowers seeking to grant and to obtain a loan on a cross-border basis. The Commission will, later in 2007, issue a White Paper presenting the policy orientations in this field.
Further information on the review of the barriers to cross-border activity can be obtained at:
http://ec.europa.eu/internal_market/finservices-retail/home-loans/integration_en.htm