10 July 2008

Plenary Meeting 7-10 July

Parliament debated the economic outlook with European Central Bank and adopted a resolution on sovereign wealth funds.

Speech Trichet: Introductory to the European Parliament

The recent financial market corrections do not provide any convincing evidence for the setting up of a new authority for EU supervision, ECB President Trichet said in a speech before the European Parliament. However, it is of crucial importance to further exploit the potential of the Lamfalussy framework, he added.

To prevent future crises supervisors should make further efforts to reinforce co-operation and exchange of information on a cross-border basis, he said.

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ECB praised for reaction to financial turmoil, caution advised on rate rises

The European Central Bank has done “excellent work” in managing the financial turmoil, enhancing its reputation said MEPs in their annual report on the ECB. Parliament also calls for the ECB to monitor exchange rates and take action if necessary and to be cautious about raising interest rates to avoid endangering growth.

The report backs the ECB’s “two-pillar” approach to targeting price stability, which includes analysis of the M3 measure of money supply. It highlights the risks of asymmetric economic developments within the euro area and calls on the ECB to tackle these risks at an early stage. Respect by Member States of the Stability and Growth Pact, is among the strongest measures to protect against these risks.

MEPs discussed inflation, interest rates, financial supervision and the prospects for growth and jobs during their annual debate with the President of the European Central Bank. 

EP Press release

MEPs call for action over Sovereign Wealth Funds

Parliament is concerned that the lack of transparency of certain sovereign wealth funds does not allow a proper understanding of their structures and motivations. It wants to see a global code of conduct and for the Commission to examine what measures might be taken under EU law to improve the situation.

In a resolution adopted by 661 votes in favour, 11 against and 23 abstentions, MEPs ask the Commission to work closely with the IMF and OECD to establish a global code of conduct for Sovereign Wealth Funds. But the Commission should also monitor SWF activities and play a co-ordinating role in ensuring national initiatives do not go against the commitment to openness to investments or endanger the EU's position on global markets.

Parliaments say the Commission and Council should examine what legislative or other tools the EU has regarding transparency requirements, voting rights, shareholders' rights and golden shares that could allow reactions to ownership problems following SWF intervention.  It wants to check the options for co-ordinated EU-level action.

MEPs also call on the Commission and Council to conduct an in-depth analysis of the functioning of global financial markets, defining a strong EU vision or what should be the principles and rules guiding their functioning.

Adopted text forthcoming

Adopted Text by Parliament 

© European Parliament