Members of the European Parliament voted today on the European Markets Infrastructure Regulation (EMIR), the first ever legislative proposal put forward by the European Commission to regulate ‘Over-The-Counter’ (OTC) derivatives markets. NGOs welcome the agreed text as a first step to tackle excessive speculation in agriculture commodities.
Marc Olivier Herman, Oxfam International’s EU policy advisor, said: “Today’s vote in the European Parliament is as a welcome first step in a series of European legislation on derivatives which should put an end to excessive speculation affecting millions of people worldwide as food prices are spiralling out of control. Following today’s vote, the onus is now on EU Finance Ministers to quickly adopt a position on the proposed legislation. EU member states must resist the strong pressure from the financial industry and big businesses and put the interests of taxpayers and hungry people first.”
Kenneth Haar from Corporate Observatory Europe, said: “We welcome that reporting of all derivatives has been guaranteed through the amended texts. This should provide the urgently needed transparency to assess financial speculation on food prices through OTC derivatives.”
On the negative side, NGOs deplore that the text voted by the EP maintains exemptions to clearing, an insurance system against default, for pension funds.
Daniel Pentzlin from Friends of the Earth Europe, said: “We regret that the text has created a huge loophole by exempting pension funds from clearing, with the option to extend this exception for more than three years. It is also worrying that the text considers exceptions for foreign exchange derivative trading as this can also be harmful for developing countries.”
Deborah Doane, director at the World Development Movement (WDM) said: “This vote will lead to greater transparency in financial markets, but to effectively curb excessive speculation on food prices we need strict limits on the amount that financial speculators such as banks and pension funds can bet in these markets. Limits are set to be introduced in the US and proposals for limits on financial speculation are expected from the European Commission this autumn. Europe must take action to tackle this damaging and reckless financial speculation which has pushed millions around the world into hunger and poverty.”
For more information you can contact SOMO senior researcher Myriam Vander Stichele