Six months after the launch of euro notes and coins, holidaymakers can withdraw cash from anywhere in the European Union without paying extra bank charges.

Under a new European law, foreign charges for withdrawing euros or paying by bank cards, must be the same as the charges within the country where the transaction takes place.

If your bank raises the charges, change your bank

Jonathan Faull European Commission

At present, European Union (EU) citizens pay an average of 4 euros (�2.58) to withdraw 100 euros from a cash machine outside their own country.

They are also charged for using credit and payment cards in other member states.

"Crossing a border will no longer cost bank customers more," Frits Bolkestein, the European Commissioner for the Internal Market said in a statement.

The new rules also apply to all card payments in euros in Britain, Denmark and Sweden even though these three countries are not members of the single currency.

Britons who have opened Euro accounts within the UK may also benefit from the new rules.

But the typical British traveller who has a sterling bank account, and is withdrawing Euros from a cash point on the continent, will not benefit as the rules do not apply to sterling transactions.

Banks complain

The banking industry has criticised the new law, claiming it will add to their costs even though they admit cash machines are largely interlinked electronically.

At present there is no EU system for credit transfers or credit payments.

Cross-border withdrawals from cash machines are largely completed through the Maestro or Cirrus clearance systems but these do not cover the whole of the EU.

About 90% of cross-border transactions are made by credit or debit card.

The new law will also requires a standardised cross-border fee for euros transferred between EU accounts from 1 June, 2003.

Consumer choice

The EU bill does not prohibit banks from increasing their fees on payments and withdrawals, as long as they charge the same amount for domestic and cross-border payments.

The Commission said it had no power to stop a rise in domestic fees, but said consumers would just change banks.

"If your bank raises the charges, change your bank," said Commission spokesman Jonathan Faull.

The new law requires banks to give customers advance notice of any fee changes.

The Commission also said that banks which did not comply with the laws would face sanctions enforced by member states.