Financial literacy and education for Europeans

Key points

The EESC:

• recommends to actively promote financial literacy as a precondition for the financial stability and independence of EU citizens, to reduce inequalities, to strengthen social rights, and as a complementary tool for effective planning of social welfare and pensions, access to health insurance and coverage for long-term care;
• considers necessary to address, through targeted and tailored initiatives, the heterogeneous levels of financial literacy between Member States and among different groups of the population;
• notes the importance of understanding debt, the functioning of financial markets, the tax implications of investments, and insurance as a risk management tool. These aspects have a pivotal role to deal with risks, to seize financial opportunities, and to plan for retirement;
• highlights the importance of improving the understanding of three key concepts among citizens of all ages: i) diversification; ii) correlation and decorrelation between assets; and siii) the role of time, patience and a long-term perspective;
• encourages the relevant institutions to undertake significant initiatives in financial literacy starting from the early stages of education, including its inclusion in school curricula;
• recommends that civil society and non-profit stakeholders play an active role on education programmes, in order to nurture the financial literacy and entrepreneurial skills of people starting up new business ventures. A particular focus should be on new entrepreneurs from disadvantaged backgrounds;
• considers useful to establish a ‘European Financial Education Day’ to promote awareness-raising initiatives;
• stresses the importance of developing a regulatory framework that is flexible enough to incorporate the new trends that evolve in financial markets, ensuring timely response to real world developments, for example, on social media and so-called ‘finfluencers’;
• warns against the growing dangers posed by financial scams and online fraud, which evidence the importance of financial knowledge and skills and behavioural awareness. Coordinated action at European level, accompanied by national measures is urgent and necessary.

Practical information

The EU Youth Test at the EESC was applied to this opinion. Human Development Research Initiative (HDRI) was chosen by a group of interested youth organisations to represent all of them during the opinion-making process.