The Irish Bankers' Federation (IBF) has rejected the contention by EU Commissioner Mr David Byrne that the cost of transferring funds cross-border within the euro zone should be the same as doing so domestically.

The IBF was responding to the publication by the Commission of a survey of cross-border bank charges within the euro zone. The survey concluded that banks still charge consumers too much for cross-border transactions involving small amounts of money.

Mr Byrne said that the Commission intends to propose a regulation forbidding banks in all member-states from levying different charges for cross-border euro payments and for corresponding payments at national level.

An IBF spokesman said any action taken by the Commission should proceed on the basis of reality rather than a political ideal. Among the factors to be taken into account, he said, was the imbalance in volumes between domestic and cross-border payments, estimated at 300to-one for the EU as a whole, and as much as 500-to-one for the Republic. Bank of Ireland, one of the Irish banks included in the survey, said that the Commission's proposal on identical pricing inferred that the cross-border transfers should be provided by banks at a significant loss. The bank said the implementation of the proposal might result in the withdrawal of certain services.

Mr Byrne was adamant that harmonisation of banking charges must form part of the successful operation of the single currency. "One of my concerns is that the single market is operating for the benefit of producers and not consumers."

The survey found that the average cost of sending €100 from one euro-zone state to another was €17.36, including costs to the originator and the beneficiary. At €25.04, the Republic emerged as the second most expensive point of origin for this type of transaction.

Irish banks scored well above the euro-zone average for other forms of cross-border payment included in the survey. They have the lowest charges for use of ATM cards abroad in the euro zone for withdrawals of €50 and €100.

No charges are imposed by Irish banks for use of their payment cards in the euro zone and Irish banks are now among the lowest chargers for bank note exchange for euro currencies.

The European Consumer Centre, which provided Irish research for the survey, criticised Irish banks for the lack of information provided to customers on the different transfer options available.