Saturday, February 18, 2006

And the ESCB looks at SEPA slightly different... or not?

In what appears to be a collaborative effort with the European Commission, the ESCB has published the fourth progres report on SEPA. But their mantra may be slightly different, with SEPA focusing on the euro-area:
* SEPA will eliminate national barriers
* SEPA will focus on the euro area
* SEPA will be future-oriented
* SEPA will be user-friendly
* SEPA will require a communication strategy
* SEPA will also benefit banks
* The time frame of the SEPA process will be upheld
* SEPA objectives will focus on establishing common standards and procedures

It is interesting to note that the report does acknowlegde that there is a dependency wih the TARGET2 effort of the ESCB. But it does not point out the resource dependencies of the private sector. EPC-payment infrastructure needs to build on Target or TARGET2, but as this project delays, so will EPC.

It is also quite interesting to note that the ambitions that the ESCB sets out for the private sector seem to exceed those that the ESCB itself will achieve. If TARGET2 were to eliminate the national barriers just as SEPA does, there would be a single functionality with a single price for banks, regardless of their location. Yet, that dream will not come true until way after 2010....

Could it be possible that ESCB and EC suffer from a case of projection? And that the appeal to the outside world (private sector) to do single European stuff in a minimum time frame with a maximum reach is an outward projection of inner desires and fears? And that the outward projection shifts the attention from the inward realization that exactly that same goal is what the EU-institutions are looking for themselves but what appears to be out of reach?

We can see that while the discussion on the Eu constitution is halted, the services directive is being downgraded (not leading to a full EU) and Target2 remains a hybrid domestic/EU settlement system. And we may even fear that the outward projection will not make place for the realisation that the European ambition and/or timeframe should be re-assessed. Will the private sector then be obliged to prematurely do away with previous investments? And will the citizen/customers need to pay for new pan-European payment stuff that they didn't want in the first place?

If I were to bet on commercial led institutions or government organisations to understand what a market wants, I would go for the commercial sector. Still, if we feel that EU en ESCB have a better idea on what the citizens/customers want (and their willingness to pay for it) one could choose to implement their idealistic goals. But we shouldn't be surprised if a new referendum then has 15 states turning a EU constitution down.