THE EUROPEAN, page 23

reports Tonv Snape in BRUSSELS

PITY the poor European consumer. The practical benefits of the single market continue to elude them. Chargeless banking, generous life assurances, cut-price mortgage rates and cheap car insurance - the aspirations marked in green in every household budget - look set to remain the province of domestic institutions for a long time to come.

; You could blame the European Commission, it is blamed, after all, for everything else that goes wrong with the single market. The Commission launched a new green paper last weekFinancial Services: Meeting Consumer's Expectations - which went off like a deflated balloon.

But if the Commission had had its way, by now Belgians would already be saving Bfr30,000 ($960) a year by buying comprehensive cover in Britain for their Peugeot 205s. Britons, in turn, would be throwing money at Spanish savings banks offering over nine per cent interest a year. And Germans would be seeking French life assurance policies which they can then cash in if they manage to reach maturity without falling under a Mercedes truck.

So pity the poor consumer. The choice in financial services is not there for the asking.

The Commission blames the member states for their sluggish implementation of more than 50 related directives. And it is true that the huge differences in national legal, tax and social security systems tie any reforms in cross-border financial services to government policies in these areas - and hence to elections.

"The new Green Paper talks about a lot of things which could have and should have been done long before now without any need for a further extensive consultation," said Jim Murray, director of BEUC, the European consumer organisation.

"We see it as a passive document, which says that unless you can prove there's a problem in this area then we won't act. But that isn't the way the Commission approaches the question of creating a single market for industry, for example. The consumer is missing choices in Europe. They might be dissatisfied with the financial service they're getting in their own countries, with their own banks or their own insurance services, but they are yet to be given the possibility of going elsewhere."

Diane Iannucci, advisor to the Banking Federation of Europe, said she was pleased with the green paper because it made a distinction between financial services and so-called "distance-selling", for which a directive is currently being approved, and where concern is mounting over whether companies actually offering cross-border financial services can meet their contractual obligations from a distance.

'We are happy that financial services have been excluded from the distance-selling directive'" she said. "The Green Paper is the first written documentation we have from the European Commission on the intention to have some legislation on financial services only." The cost of insurance often depends on the size of the country in which you live. The larger the country - and therefore the number of people paying into a national insurance company - the cheaper the policy.

In Belgium, insurance policies, particularly for cars, but also pensions and life assurances, are notoriously high. But then the population of Belgium is only ten million.

François de Clipile of Belgium's Professional Association of Insurance Companies admitted: "A free market in insurance has not really been introduced and the reason is that companies were created, in the market they wanted to be in, before the creation of the European single market. Also, the European market is not a complete reality, because of fiscal differences, and other legal differences, between member states. It is too expensive for a British insurer to offer insurance under the Belgian legal system. The costs linked to an insurance are higher in Belgium because the market is a little market. Smaller numbers of people, higher distribution costs, higher general costs.

"Of course, it would be better if legislation on this would be harmonised across Europe, but it will be difficult to reach such an aim for some years to come. Each country is attached to its legal system and certainly to its fiscal system.

"As far as life insurance is concerned, the difficulty in Belgium is that we have a very well-developed social security system and most people do not feel it is necessary to take life insurance next to that.

"Harmonisation win take a lot of time, we are sure of that. It could take years."