Financial Exclusion in the European Union: Addressing Difficulties in Accessing Finance within the Current Integration Framework

Abstract

This article explores the role of the European Union (EU) in addressing financial exclusion. From a multidisciplinary point of view, we focus on the EU's approach, emphasising the peculiarities derived from the European integration process. In spite of the high level of financial inclusion in the EU in comparison with other regions, there is a substantial percentage of people and small and medium enterprises (SMEs) facing difficulty in accessing financial services; the population at risk of financial exclusion is growing due to increasing unemployment and cuts in social assistance services. This article, after contextualising the problem of financial exclusion in the global context, presents a revision of European initiatives associated with this problem, notably the reform of the financial system and the increasing integration of its internal market. We discuss the extent to which this legislation and related policy recommendations are effective, particularly considering the current framework of economic governance.

Keywords::

• European Union
• financial inclusion
• social crisis

Notes

¹ Among these empirical approaches, noteworthy is the SILC questionnaire on over-indebtedness and social exclusion. This instrument provides valuable information on consumers' point of view on the financial condition and perspectives of EU households, placing particular emphasis on debt and financial exclusion. However, the latest data currently available are based on EU-SILC 2008 and thus are not yet showing the effects of the current crisis. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Over-indebtedness_and_financial_exclusion_statistics

² Statistical data may be completed with those provided by the Observatory of European SMEs (http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-observatory/index_en.htm) and the SME Performance Review (http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htm).