Free movement of cheques?

Since the abolition of exchange controls many years ago there has been free movement of money throughout the EU. Except that it is not free. It is very expensive. To transfer payments from a bank in one Member State to a bank in another involves the payment of heavy charges, whether the transfer takes the form of a bank draft or a eurocheque. The excuse has usually been that exchange rate adjustments between the currencies involved are a costly part of the transaction. One would have expected, therefore, that after 1 January 1999 when exchange rates for the Euroland currencies were irrevocably fixed and the currencies became merely expressions of a value in euros (i.e. no exchange between currencies is required), those transaction costs would disappear. Not at all. Continental banks are apparently unable to clear Euro zone cheques at the same cost as they clear domestic cheques. The EC Commission responded to complaints by raiding eight leading banks in Germany, France, Italy and Spain last February. Now it has extended the coverage. On 20 October last it raided more banks, this time in Ireland, the Netherlands and Belgium. Perhaps it will find the evidence of collusive cartels which it is seeking. Watch this space!