Read news from:
Austria
SHARE
COPY LINK

EUROPEAN UNION

EU braces for German-French clash on banks

Divisions between Germany and France were set to dominate the European Union summit which opened on Thursday afternoon, with the aim of shoring economic and monetary union in the face of the eurozone crisis.

Published: 18 October 2012 17:30 CEST
EU braces for German-French clash on banks
Photo: DPA

France has demanded a deal be made to establish a banking union by the end of the year, a position Germany opposes. Because of this major difference, Chancellor Angela Merkel and French President Francois Hollande met face-to-face before the other 25 leaders came together.

“This will not be a summit at which we will already take decisions but we will prepare the decisions for December so we have to set the right course,” Merkel said.

“The aim of the (European Union) council is not budgetary union, it’s banking union,” Hollande said on arriving for a pre-summit lunch with Socialist heads of state and government.

“So the only decision we must take, or rather confirm, is the setting up of a banking union by the end of the year, and notably the first stage, which is banking supervision,” he said.

“The best way to proceed is to respect the decisions we have already taken,” Hollande said on arriving at the venue for the summit.

He said the context for the summit was “very tough times in social terms, and economic terms,” but underlined that leaders are no longer under “very tough pressure from the markets.”

Hollande suggested that divergences with Germany were “perhaps for reasons related to the electoral calendar,” with Merkel facing general elections next September.

Merkel and British Prime Minister David Cameron said earlier this week that more work was needed to reach a deal on a European banking union at the two-day summit beginning later Thursday, the first since a June summit agreement.

In Berlin earlier Thursday, Merkel cautioned against rushing into an ineffective supervisory system for European banks.

Instead, she said the emphasis at the summit should be on fiscal discipline by agreeing to give the European Commission’s top finance official the power to veto national budgets of member states.

“We believe, and I say that for the whole government, we could go further by granting the European level real rights to intervene in national budgets” Merkel said.

She also reiterated German opposition to rushing into a new system of policing the banking sector rather than taking the time to ensure that what is created is effective, calling for “quality” over “speed.”

France and Spain called last week for moves towards a banking union to be agreed by the end of the year, a timetable that Germany finds unrealistic.

AFP/hc

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

BANKING

Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Published: 13 February 2024 12:31 CET
Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

SHOW COMMENTS