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Results of the EU summit
MEPs debated on the results of the EU summit of 15-16 October. French President Sarkozy said the financial crisis had strengthened the case for a united European response to major world problems.
Mr Sarkozy said "what was a serious crisis became a systemic crisis" with the collapse of Lehman Brothers. Moreover, the solutions now being found - in which
A key point was "how can we prevent a recurrence?". He had proposed to the UN General Assembly the creation of a "new global financial system" or "new Bretton Woods". The aim must be to "overhaul capitalism", not "by questioning the idea of a market economy" but observing certain principles: no bank working with state money must work with tax havens, all financial institutions must be subject to financial regulation, traders' bonus structures must not push them to take undue risks and the monetary system must be rethought.
The
Mr Sarkozy proposed measures to ensure that "European companies are not bought up by non-European capital while their stock exchange values are low" and the creation of sovereign wealth funds by each EU country.
At a later point in the debate he pointed the finger at hedge funds and questioned the competence and independence of ratings agencies, pointing out that the latter were mainly US-based and perhaps
He also believed that "the eurozone cannot continue without clear economic governance". The European Central Bank must be independent but must be able to hold discussions with "an economic government" at head of state/government level.
Speech Sarkozy (French)
Commission President Barroso
Commission President Barroso reflected on the next step to come forward with to address specific shortcomings, specifically on capital requirements, deposit guarantees and accountancy rules. Barroso announced to come forward with a proposal on credit rating agencies proposal in November. “We will come with an initiative on executive pay based on a review of our 2004 recommendation”, he said and underlined that the Commission will also look at regulating derivatives.
He also announced the members of the High Level Group under the chairmanship of Jacques de Larosière which will provide “important input for future action” with regard to cross-border financial supervision.
Joint motion for a Resolution
MEPs called for a co-ordinated European action needed to tackle financial crisis and for measures to improve financial supervision. Parliament also stresses the importance of a co-ordinated macro-economic response to resuscitate global growth, without undermining the principles of the stability and growth pact.
The Financial market crisis has implications beyond financial markets, the resolution says. Parliament stresses the importance of ongoing access to credit for citizens and SMEs and of investments in EU infrastructure to avoid a dramatic downturn in growth and employment.
It therefore supports measure to return liquidity to the markets, and the rapid reaction of the Commission in applying state aid rules on measures taken to rescue financial institutions. However, spending public money for rescue must be accompanied by public oversight, improvements in governance, limitations on remuneration, strong accountability to public authorities and investment strategies for the real economy.
MEPs welcome the setting up by the Commission of a high-level group to consider the future supervisory architecture for EU financial services, but they criticise the lack of Parliamentary involvement in the Commission’s "financial crisis cell".
Looking beyond the immediate crisis, MEPs reiterate their calls on the Commission to propose measures to strengthen the EU regulatory and supervisory framework and EU-level crisis management, including on banks, credit rating agencies, securitisation, hedge funds, leverage, transparency, winding-up rules, clearing for over-the-counter markets and crisis prevention.
The Lamfalussy process should be strengthened, including colleges of supervisors for cross-border institutions and a clearer role and legal status for the Level 3 committees (which bring together all the Member States' banking, securities and insurance supervisors). Parliament also wants to see proposals drawn up for effective cross-border crisis management.
See also EP press release