The European Commission has proposed changes which will make monetary transactions throughout the European Union cheaper.

According to the current legislation, there is no difference in charging, if a citizen of a euro area country carries out some kind of bank transaction, regardless of which of the 19 countries in the currency union it takes place.

The proposal aims to extend this regulation to all EU countries. This will allow all consumers and businesses to take full advantage from the benefits of the Single Market when sending and withdrawing money, as well as paying abroad.

According to the words of EC Vice-President Valdis Dombrovskis, the proposal provides citizens and businesses in countries outside the euro area with the same conditions as those in the single currency area in regard to cross-border payments in euro.

All cross-border payments in euro within or outside the euro area will be taxed in the same way – with small or zero fees. This is a major change, because the fees for a simple translation can be excessive in some Member States outside the euro area. For example, a bank transfer in euros from Bulgaria will be charged as an internal bank transfer in BGN.

Under the current model, simple bank transfer fees can reach incredible levels in some EU countries outside the euro area (up to €24 per translation of €10). Today’s high fees create a barrier to the single market as they limit the cross-border activities of households, such as purchasing goods or services in another currency, as well as for businesses, in particular small and medium-sized enterprises.

This creates significant gap between the citizens of euro-area countries which are benefited by the single currency and the inhabitants of other EU Member States that can make cheap transactions only in their own country.