Morocco’s Banking Battle: Navigating EU Directive to Safeguard Vital Remittances

The talks are progressing in the right direction, the central bank governor assured on Tuesday, at the end of the quarterly meeting of its Board held in Rabat, insisting on the need to clarify certain gray areas with the French Treasury regarding this European directive published in the Official Journal of the European Union on June 19, 2024. "I have asked the negotiating team to immediately remove any ambiguity. We must not leave any terms that could be confusing," he said.

This text, which will come into force on January 1, 2026, aims to restrict the activity of foreign banks, including Moroccan ones, operating in the EU and, consequently, the transfers of MREs. Moroccan banks are present in at least seven European countries (France, Spain, Italy, Belgium, the Netherlands, Germany and the United Kingdom), facilitating the sending of funds by MREs to Morocco. In 2024, these transfers reached more than 117.7 billion dirhams, or 7.7% of GDP. According to BAM’s projections, these transfers should show near-stability this year and record a 4.8% increase to 125.5 billion in 2026.

But the entry into force of the European directive risks reducing the flow of MRE transfers, who will be forced to opt for more costly or less suitable channels to send funds to their loved ones in Morocco. It is to avoid this situation that Morocco has set up a permanent task force, bringing together Bank Al-Maghrib, the Ministry of Finance, the Ministry of Foreign Affairs as well as the Moroccan banks concerned, in order to negotiate with the European institutions and the authorities of the countries with a large Moroccan community.

After several discussions, a compromise was reached in June 2025 with the French Treasury, the country from which more than 30% of MRE transfers originate. The agreement, finalized in July, must be submitted to the European Commission. Negotiations are continuing with other countries such as Spain, Italy, Belgium and the Netherlands, to convince them to follow France’s lead. The objective is to preserve the vital link between Morocco and its diaspora, as well as the transfers of MREs, which represent a powerful lever for the economic development of the kingdom.