The Commission considers financial education as essential with a view to setting up a single European market and wishes, for this reason, to encourage European citizens to acquire basic knowledge on personal finance. This Communication aims to set out the basic principles for the provision of high-quality national financial education programmes and to present the initiatives carried out by the European Union in this field.
Communication from the Commission of 18 December 2007 - Financial education [COM(2007) 808 final - Not published in the Official Journal].
In view of the knowledge gap among consumers with regard to financial products and the increasing choice and complexity of these products, the Commission decided to promote the development of financial education within the European Union (EU).
This Communication is one element in the package of measures on retail financial services set out in the Commission's report on 'a Single Market for 21st Century Europe' and it aims to assist stakeholders in the development of financial education programmes by:
- raising awareness of the need to address low financial education;
- providing high-quality financial education within the EU;
- sharing best practices;
- developing practical tools to facilitate better financial education teaching in schools.
Importance and economic and social benefits of financial education
Financial education benefits individuals (for example, by enabling them to make better financial provision for unforeseen situations), society (by reducing the risks of financial exclusion and encouraging consumers to plan and save some part of their incomes), and the economy as a whole (by encouraging informed behaviour and the provision of liquidity to financial markets).
Two recent studies funded by the European Commission point out, among other things, that financial education is provided by a large number of actors (supervisory authorities, social workers, public education, etc.) within the Member States and that the number of national initiatives in this area varies widely.
Baseline surveys undertaken at Member State level help to set out the priorities, and facilitate the monitoring of progress after a given period of time. In addition, several studies show the positive behavioural change that can result from participation in financial education programmes.
Framework for Community action
The field of education comes under the competence of the Member States. However, action can be taken by the Community in the framework of consumer information and education measures, and by implementing measures that support and supplement the policy pursued by the Member States.
Among the actions already undertaken, the Commission has set up an online educational tool, Dolceta, offering consumer education to adults, and the ‘Europa Diary’, an information booklet for students in secondary education.
The May 2007 Green Paper on Retail Financial Services pointed out that more could be done to encourage financial education. This was also confirmed by the replies to the Green Paper, in particular with regard to the Commission's dissemination of best practices and the adoption of non-binding Community rules to aid financial education providers.
Basic principles for the provision of high-quality financial education programmes
The Commission has set out eight principles that could aid the stakeholders involved in disseminating financial education to devise and implement financial education programmes:
- financial education should be available and actively promoted at all stages of life on a continuous basis;
- financial education programmes should be carefully targeted to meet the specific needs of individuals and be timely and easily accessible;
- consumers should be educated in economic and financial matters as early as possible, from school age and this education should, preferably, be included in the general school curriculum;
- financial education programmes should include general tools to raise awareness of the need to improve understanding of financial issues and risks;
- the financial education programmes provided by financial services providers should be fair, transparent and objective. They must always be in the consumer's interest;
- financial education trainers should be given appropriate training and the necessary resources;
- national coordination between stakeholders should be promoted and international cooperation between financial education providers should be enhanced to facilitate the exchange of best practices;
- financial education programmes should be regularly evaluated and, where necessary, updated.
Planned initiatives and practical assistance
Although financial education is indeed the responsibility of the Member States, the EU can provide considerable practical assistance. The Commission has, therefore, identified the following initiatives as a matter of priority:
- setting up a group of experts in financial education, which will have the task, among others, of promoting and sharing best practices, and advising the Commission on the development of its financial education policy;
- providing sponsorship (including messages of support and the use of European logos) to the Member States and actors in the private sector, for the organisation of national and regional conferences and for any other initiatives seeking to promote financial education;
- publishing on the Commission website a database of financial education programmes and research in the EU, in order to facilitate consultation of best practices and research in this field;
- developing, from 2008, a new Dolceta module for teacher-training in financial education, with the aim of encouraging and helping teachers in primary and secondary education to incorporate financial issues into the general curriculum.