The admonishment comes in an EU communique calling for a "quantum leap" towards rapid implementation of the Financial Services Action Plan, designed to usher in a single market in financial services by 2005.

In its latest progress report, the Commission has suggested a set of critical priorities for the coming six months. The report also suggests possible benchmarks for indicating trends and developments in market integration.

Internal market commissioner Frits Bolkestein comments: "Without a single financial market, consumers and businesses will continue to pay over the odds and Europe's financial services cannot realise their full potential. Implementation of the Financial Services Action Plan is crucial to this goal."

Within the wholesale markets, the Commission priorities for the next six months include a proposal for a Directive on the cross-border use of collateral, and an upgrade of the Investment Services Directive. In the retail markets, the Commission is to issue a Communication setting out an e-commerce policy for financial services. The EU's Directive on Distance Marketing of Financial Services is also expected to be passed within the timeframe.

In order to monitor trends and developments in market integration the Commission is proposing a benchmarking of certain key indicators, including: developments in the use of cross-border collateral in the EU financial markets; and on-line provision, penetration and transaction costs of financial services, particularly in the retail sector.

France, Italy and Luxembourg are singled out in the report for their tardiness in implementing the Settlement Finality Directive. The Commission says it has opened infringement procedures aimed at bringing the laggards into line.