Livret A - EU Demands that France Ends Savings Monopoly

The European Commission has instructed France to end the monopoly by certain banks of a symbolic popular savings scheme used by nearly 50 million French people.

Since its creation in 1818, the Livret A has been the savings scheme of choice for the people of France, because it is guaranteed by the government, offers a reasonable rate of interest, and attractive fiscal advantages.

However, the scheme is only available through three banks - La Banque Postale, Caisses d’Epargne and Crédit Mutuel (where it is distributed under the badge Livret bleu).

The decision of the EU has come about because of a formal complaint received from the other major French banks, who considered that the monopoly granted an unfair advantage to their competitors.

The Commission felt that the monopoly was a breach of the competition rules of the European market and an impediment to foreign banks from establishing a base in France.

They have given France nine months in which to make the savings scheme available through all banks.

The French government announced its intention to appeal against the decision. They claim that the purpose of the scheme is to fund the construction of social housing, as the funds are deposited with the government, who then pay a collection fee to the banks.

There is also concern about the impact of the generalisation of the savings schemes to the other banks on the fortunes of the current suppliers, notably the French post office, for whom the Livret A is a most important source of revenue. Livret A currently offers a rate of 2.75%, free of all tax and social security charges. Most French families hold an account, although the maximum amount that can be held is €15,300 per person. The savings account is also open non-residents.

You can read more about savings schemes in France in our Guide to Banking in France .