Belgian Prime Minister Alexander De Croo (Open VLD) has suggested that savers who are dissatisfied with the interest rates provided by their banks can "easily" switch banks.
"The consumer must recognise their power: they can make choices and move their savings to banks that offer a higher interest rate," De Croo said in a parliamentary committee hearing on Tuesday. He stressed that "this can be done easily", though what might have been intended as practical advice might equally be taken as patronising by voters already unhappy with the premier.
The Prime Minister's suggestion was immediately criticised by Dieter Van Besien (Flemish Greens), who pointed out that changing bank is often a highly complicated and arduous process.
"Your salary or pension is paid into an account, you have direct debits and standing orders," Van Besien said. "Perhaps you are also bound by a mortgage or pension savings. The fact that it is a whole ordeal to change banks is precisely the reason why competition does not work."
'The market is not working'
Belgium's major banks have come under increasing pressure to increase their savings rates over the past few months as repeated interest rate hikes by the European Central Bank (ECB) have largely failed to filter down to savers.
Last week Belfius became the first major bank to raise its rates, announcing that from 1 July rates on its regular savings accounts will increase from 0.50% to 0.90%. Those on its premium "Fidelity" savings accounts will be raised from 0.80% to 1.25%. Keytrade, Deutsche Bank, and vdk have all since announced similar increases.
However, the rate hikes still leave savers earning well below the 3.25% rate that banks receive from parking their excess cash overnight at Belgium's central bank (otherwise known as the ECB's deposit facility rate).
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Indeed, this discrepancy has led some members of Belgium's Vivaldi Federal Government coalition – most notably the Flemish social democratic party Vooruit – to propose legally enforcing a rate increase by indexing the minimum savings rate to the ECB's deposit facility rate.
Similar views are shared by parties outside Belgium's governing coalition. In the committee hearing, Marco Van Hees of the left-wing Belgian Workers' Party [PTB-PVDA] took the opportunity to question the Prime Minister on when the Federal Government will intervene if the country's banks continue to refuse to raise interest rates.
De Croo had previously stated that action would be taken if banks persist in withholding their gains from their customers. "How many months are you going to wait?" Van Hees asked before critiquing De Croo's faith in trickle-down economics. "The facts prove otherwise: the market is not working."
