EU Banking Directive Threatens Remittances from Moroccan Expats

The European directive is mainly aimed at blocking the activity of British banks after the UK’s exit from the EU (Brexit). But it also applies to all foreign banks established in the EU, particularly Moroccan banks present in seven European countries and facilitating the transfer of funds from Moroccans residing abroad (MRE) to Morocco.

The implementation of this directive initiated by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (FISMA), under the European Commission, and adopted by the European Parliament, risks negatively impacting the flow of MRE transfers, and consequently, the Moroccan economy. Abdellatif Jouahri, Governor of Bank Al-Maghrib (BAM), mentioned this fear on Tuesday, during the press conference held on the sidelines of the central bank’s council meeting, reports Le360.

Moroccan authorities (Ministry of Foreign Affairs, Economy and Finance, Central Bank) and Moroccan banks present in the EU have launched close negotiations with the European Commission and its FISMA department, as well as with the competent authorities of France, Spain, Italy, Belgium, the Netherlands for a harmonious application of this EU regulation in all EU countries.

A new round of negotiations will be launched this October and will continue throughout the last quarter of the year, the central bank governor said. The other concern expressed by the BAM governor is related to restrictive measures on the activity of Moroccan banks in certain EU countries. And the rise of the far right in Europe is likely to exacerbate the situation, he warns.

According to the Office des Changes, these MRE transfers have shown an average annual growth rate of 19% over the 2020-2023 period, reaching 115.3 billion dirhams in 2023, up 4.1% year-on-year. From January to July 2024, they exceeded 68 billion dirhams, up 3.3% compared to the same period in 2023, and should reach 121.8 billion dirhams in 2025. In 2023, the largest share of MRE transfers comes from France (30.8%), Spain (12.6%), Saudi Arabia (10.7%) and Italy (9.2%).