Draft European Parliament report on financial legislation makes progress on loopholes in response to public pressure
Markus Ferber, the MEP leading the European Parliament’s work on financial markets reform has today published proposals which would go some way to putting the hunger of people before the hunger of financial institutions.
The proposals come in the form of a draft report on the European Commission’s proposed changes to the ‘Markets in Financial Instruments Directive’ (MifID). This piece of legislation plays a crucial role in the fight against excessive and harmful food speculation.
Ferber’s report partly reflects the key demands of more than 8000 European citizens who petitioned the European Parliament in January, calling for MiFID to close down Europe’s hunger casino.
The report marks a campaign success, evident in the elimination of a controversial Commission proposal to include the option for member states to use ‘alternative measures’ to position limits; a loophole which pandered directly to the demands of financial industry lobbyists.
Position limits are caps on the size and number of bets that financial actors can make on the future price of basic food stuffs; they are vital to put an end to food price volatility from excessive speculation.
In addition, the Parliament’s draft removes the Commission’s attempt to limit member states’ abilities to impose more restrictive limits. It also makes some progress on the use of high-frequency trading, another driver of market volatility.
Whilst the deletion of these loopholes is progress, there is still room for improvement as the report does not provide for position limits to be used to explicitly address the impacts of speculation on commodity prices.
The spotlight now moves to the Parliament’s Economic and Monetary Affairs Committee. Friends of the Earth Europe is calling on the committee to vote in favour of the amendments and help put an end to European banks, pension funds and insurance companies profiting from the hunger of the world’s most vulnerable.
