Food campaign news
EU financial reform plans will not curb soaring food prices
Plans for EU financial reform to be announced today are expected to be insufficient to tackle soaring global food prices, say campaigners from the World Development Movement.
Proposals to be released in Brussels today for a major overhaul of the EU’s financial architecture are set to include measures to increase regulation of commodity markets, where banks and hedge funds speculate on the price of food. But a leaked draft revealed a series of loopholes which campaigners say would make the proposed rules “completely ineffective” in preventing financial speculation from driving up food prices.
The US has already moved to curb excessive speculation on food prices, and on Tuesday American regulators voted to introduce limits on the largest speculators’ involvement in food markets. French President Nicholas Sarkozy is pushing for tough European regulation, but UK Chancellor George Osborne, influenced by the City of London, is understood to be blocking tighter controls.
European commissioner for the internal market, Michel Barnier, who is expected to announce the EU plans today, has spoken out in favour of regulation, telling the European Parliament in January last year, “Speculation in basic foodstuffs is a scandal when there are a billion starving people in the world… I am fighting for a fairer world and I want Europe to take the lead on that."
But the rules will not work in their current form, says Hannah Griffiths, head of policy at the World Development Movement: "The lack of strict controls would make the proposed European regulation completely ineffective," she said today.
The reforms call for limits on the bets of the largest players but allow for “alternative arrangements”, which risk undermining the proposals. The rules also do not aim to tackle excessive speculation, which campaigners argue is essential to ensure that limits are set at a level that would prevent speculators pushing up food prices.
A heated battle in the European Parliament is now expected before EU member states and MEPs vote on the proposals next year.
Hannah Griffiths continued:
If the EU doesn’t introduce clear, hard rules to limit financial speculation on food, it will be condemning millions of people to a future of hunger and poverty. It’s now up to the European Parliament to make sure that the commission’s weak proposals are strengthened so they actually work to help control food prices. In the UK, all eyes are on George Osborne: will he be pushing the EU to meet the greed of City speculators and lobbyists or the need of the world’s poor?
Michel Barnier is due to reveal the proposals, which are the result of the Commission’s review of the EU’s Markets in Financial Instruments Directive (MiFID), at a press conference at 1pm, Brussels time.
For more information, call Miriam Ross on (+44) (0)20 7820 4913, (+44) (0)7711 875 345 or email firstname.lastname@example.org