Friends of the Earth Europe and 25 other environmental, social justice, human rights and development groups are urging European governments and parliamentarians to use the review of EU financial legislation (MiFID) [1] to curb financial speculation in food and other commodity derivatives markets.
Lack of sufficient regulation has led to increased price volatility in the markets for food commodities, contributing to the recent food price spikes that have left millions across the world facing hunger and poverty.
Governments and politicians can put a stop this by including strict position limits and meaningful transparency within the MiFID, and by ensuring oversight and supervisory powers for effective regulation. Additionally, banning harmful trading methods and financial entities from speculating in commodity markets is crucial. The hunger of the world’s poor must come before the greed of banks and speculators.
The European Union has a legal obligation to ensure its policies are coherent with sustainable development objectives, at home and abroad [2]. By failing to regulate the financial industry, and preventing excessive food speculation contributing to higher and more volatile prices of basic foodstuffs, the EU will directly contravene its goal of eradicating extreme hunger and poverty, and instead, exacerbates it.
[1] The Markets in Financial Instruments Directive (MiFID) and the new respective regulation (MiFIR)
[2] Policy coherence for development, from the Council of the EU (2005) and Art.208 in Lisbon Treaty
