EU Ministers Leave the Door Open for Harmful Food Speculation
Anne van Schaik, accountable finance campaigner at Friends of the Earth Europe,
Tel: +31 6 24343968, email: anne.vanschaik@foeeurope.org
Angela Corbalan, Oxfam,
Tel: + 32 473 56 22 60, email:angela.corbalan@oxfaminternational.org
Christine Haigh, World Development Movement,
Tel: +44 7820 4900, or +44 7711 875345,email:christine.haigh@wdm.org.uk
Myriam Vander Stichele, SOMO (Centre for Research on Multinational Corporations),
Tel: +31 6 12060158 email: mvanderstichele@somo.nl
Andreas Winkler, Foodwatch
Tel: +49 (0)30-24 04 76 290, email: presse@foodwatch.de
Anne van Schaik, accountable finance campaigner at Friends of the Earth Europe,
Tel: +31 6 24343968, email: anne.vanschaik@foeeurope.org
Angela Corbalan, Oxfam,
Tel: + 32 473 56 22 60, email:angela.corbalan@oxfaminternational.org
Christine Haigh, World Development Movement,
Tel: +44 7820 4900, or +44 7711 875345,email:christine.haigh@wdm.org.uk
Myriam Vander Stichele, SOMO (Centre for Research on Multinational Corporations),
Tel: +31 6 12060158 email: mvanderstichele@somo.nl
Andreas Winkler, Foodwatch
Tel: +49 (0)30-24 04 76 290, email: presse@foodwatch.de
Little will be done to curb harmful food speculation today as EU finance
ministers meet to approve their position on the new Markets in Financial
Instruments Directive (MiFID II) - which sets new regulations for financial
markets. According to a broad coalition of environmental and development
organisations, loopholes in the legislation will render it ineffective to
prevent food speculation, and the resulting food price spikes that hit the
poorest the hardest.
Anne van Schaik, accountable finance campaigner at
Friends of the Earth Europe, said: "Food speculation profits financial
institutions, and costs the world's most vulnerable the food on their plates.
Watertight regulation of food speculation is vital to prevent excessive
speculation driving up food prices - but finance ministers have failed to agree
effective controls, such as limits to the bets that speculators can
make."
Marc Olivier Herman, EU policy advisor at Oxfam, said: "EU
governments failed to tackle the systemic risk that unbridled speculation poses
to world food security. It is now crucial that the European Parliament takes a
stronger position in upcoming negotiations on behalf of the millions in poor
countries who are hit by high and unpredictable food prices, and for families in
the EU who feel the impacts of rising food bills."
The organisations
expressed concern that European regulators will not set adequate EU-wide limits
to the bets speculators can make and that limits may not be comprehensive or
applicable to all types of traders - which will allow financial institutions to
sidestep regulation.
Christine Haigh, policy officer at the World
Development Movement said: "We are deeply concerned over the fact that in the
current text, limits on speculation will be set at national level, rather than
being consistent across the EU. This will pit the member states against each
other in a ‘race to the bottom' to set the weakest limits".
Myriam Vander
Stichele from SOMO said: "The new legislation will not be effective if there are
no clear position limits on over-the-counter commodity derivatives or ‘swaps',
often linked to speculative trading. The US has put such limits into law and the
EU must follow suit in order to prevent traders from avoiding these new rules.
The EU has been giving in to too many demands from the financial services
lobby."
Discussions between the European Parliament and Council will
continue with an agreed text due for adoption in March 2014, supported by the
European Commission. The organisations identified eight of the most dangerous
loopholes and outlined solutions - to ensure European policy-making puts the
hunger of people before the greed of financial institutions and puts a stop to
the damage done by financial markets through excessive and harmful
speculation.
***
NOTES:
A group of NGOs have identified eight of the most important loopholes which
remain in the current text and have outlined how to fix them: www.foeeurope.org/sites/default/files/makefinancework_mifid_loopholes_june2013.pdf
Concord
Denmark, Corporate Europe Observatory, Foodwatch, Friends of the Earth Europe,
Oxfam, SOMO, World Economy, Ecology & Development - WEED and the World
Development Movement have published extensively on the issue. A new report from
a group of Belgian development NGOs and the Network for Alternative Financing
casts new light on the involvement of financial institutions based in Belgium in
food speculation:
http://www.cultivons.be/uploads/assets/294/1371564319593-La_complicite_des_banques_final.pdf
http://www.cultivons.be/uploads/assets/292/1371556801765-speculatie_banken_dossier_nl.pdf