From: Biwah 
Newsgroups: uk.finance misc.invest.real-estate
Subject: Guardian: EU mortgages poised for shake-up
Date: Mon, 14 Feb 2005 07:52:59 +0000

EU mortgages poised for shake-up

Commissioner promises to slash bureaucracy and costs for cross-border loans
in EUR4 trillion market

David Gow in Brussels
Monday February 14, 2005
The Guardian

The EU is planning a radical shake-up of Europe's EUR4 trillion (£2.75
trillion) mortgage market this year to make it easier for consumers to get
cheaper cross-border home loans, according to Charlie McCreevy, the internal
market commissioner.

Mr McCreevy, a former Irish finance minister, said last night that he
intended acting on 48 recommendations put forward last year by a group of
financial experts for opening up the mortgage market in which only 1% of
loans are now cross-border - mainly for second homes abroad.

He also made plain, in an interview with the Guardian, that he would scrap
or amend myriad regulations stifling economic growth and resist the pressure
of EU bureaucrats for new laws in financial services and other sectors, and
impose at least a year-long freeze on new legislation.

Mr McCreevy said: "This EUR4 trillion market, the stock of outstanding
loans, accounts for 40% of EU GDP and, if we can open it up, it would be of
immense benefit for consumers by bringing more innovation in the sector,
coming up with better and better - and cheaper - products. It would also
release more purchasing power to spend on other economic activities."

But he insisted that acting on the 48 recommendations put forward by the
forum group on mortgage credit to promote more choice among home loans would
not mean new legislation. "In this era of new technology and growing use of
the internet there's no reason why you should not be able to access the best
deals."

The group, which said consumer confidence was a prerequisite for
cross-border loans, wants the widely differing national laws on mortgage
credit and deed contracts brought into line along with those on consumer
protection. Some want full-scale harmonisation of the APRs charged and of
early repayment fees.

Mr McCreevy, who is drawing up proposals for later this year, said: "In this
area, as in others, less regulation means better regulation and I intend to
deliver on that. Any new proposal has to add significantly to economic
activity and growth. If it's marginal we won't do it and I have told my
services to get used to this diktat: you don't have to be hyper-active the
whole time to be effective. If regulations are hindering what we are doing
they should be scrapped and repealed.

"I want to slow down the trend and if we stop the avalanche coming down upon
our heads this would be a major achievement. We should be concentrating on
implement ing and enforcing the beneficial rules we already have in place."

Gerhard Schröder, the German chancellor, will tomorrow meet strong
resistance to his demands that the European commission strangle the EU's
controversial services directive opening up the market in areas such as
professional advice from lawyers and doctors, Mr McCreevy indicated.

Mr Schröder and Jean-Pierre Raffarin, the French premier, have joined forces
to demand that Brussels waters down the proposed new laws, which ac cording
to academic studies, could create 600,000 jobs and increase EU trade and
investment by between 15% and 35%, and impose protectionist measures.

The commission has already accepted that the current proposal will have to
be amended, making clear that public health and education are excluded, but
Mr McCreevy said services accounted for about 70% of EU GDP, including in
France and Germany, and a similar proportion of new jobs.

"It doesn't take a mathematician to realise that open ing up that sector
would have a huge economic impact."

The directive, the brainchild of his predecessor, the Dutch Liberal
free-marketeer, Frits Bolkestein, is to be discussed by EU finance ministers
later this week, with Guenter Verheugen, the commission vice-president in
charge of enterprise, saying bluntly that "it won't fly politically as it
stands". Mr McCreevy, a political realist, said: "We'll see what
clarifications or adjustments can be made; I hope to narrow the gap over the
coming weeks."


http://money.guardian.co.uk/news_/story/0,1456,1412367,00.html