BRUSSELS – A key part of European Union rules making it simpler and cheaper for people to make cross-border payments will be delayed by up to a year as governments drag their feet, a top banker said yesterday. EU states and lawmakers are thrashing out a new legal framework or directive for a single euro payments area for a January 2008 start-up. But this deadline is unlikely to be met according to Gerard Hartsink, chairman of the European Payments Council, a banking industry group devising standards that all the bloc’s 7,000 banks will have to comply with. «Even if the directive is adopted in one reading by, say, May and you have the standard transposition time (into national law) of 18 months, then you are at the end of 2008,» Hartsink told Reuters in a telephone interview. Under the proposed scheme, the bloc’s 500 million consumers would be able to make card payments, transfer money and authorize direct debits for anywhere in the 27-nation bloc in euros from one bank account. The European Commission says this will spur cross-border services and cut the cost of payments through competition. But without a legal framework in force, the new pan-EU direct debit standards could not be enforced. A single payments area for credit transfers and payment cards was still set for January 2008, said Hartsink, who is also a senior executive vice president of Dutch bank ABN AMRO. «In particular for direct debits, it is necessary to have legal certainty and that problem is not on the table for credit transfers and cards,» Hartsink said. Life will be more complicated for consumers and companies, Hartsink said. «For companies that will deliver their services to consumers or businesses in more than one country in the same euro currency, for them it’s key they can use the same instruments to collect money out of the bank accounts,» Hartsink said. EU states and the European Parliament have joint say on the new rules, but the assembly had to delay its first reading vote because states disagreed over how much new competition banks should face in the sector. In November, finance ministers agreed to reach a swift deal in early 2007. Hartsink was also disappointed that ministers failed to agree to early adoption of the new payments system by public authorities which represent half of eurozone economic activity. «The public sector is really key. They have to show their commitment,» Hartsink said. Some member states have said privately they remain to be convinced that the new pan-EU payments system is better than the national ones it will replace from 2010. The purchase of goods and services generates 231 billion transactions a year across the EU, worth -52 trillion ($67,690 billion) but only 3 percent are cross-border, according to European Commission figures.