MEPs voted today on the proposed financial reforms known as MiFID (the Markets in Financial Instruments Directive).
The reforms adopted impose limits on the amount of shares a speculator can hold in the market, but serious loopholes mean food speculation can continue to drive up food prices and price volatility.
Campaigners have been calling for strict rules to stop speculation driving food price increases and price volatility – if done right, this could rein in excessive speculation on food prices, and protect the world’s most vulnerable from the whims of Europe’s big financial players.
Anne van Schaik, sustainable finance campaigner at Friends of the Earth Europe said: “Some MEPs voted to curb food speculation, but it was not enough, and it remains a threat. The European Council still has the chance to put a stop to food speculation in November. There are close to a billion people hungry already in the world, and Europe must put the hunger of people before the hunger of the financial sector.”
Christine Haigh, the World Development Movement’s policy officer, said: ‘The text adopted yesterday by the Economic Affairs Committee contains dangerous loopholes: an overly narrow definition of the limits to be imposed on speculation and generous exemption clauses excusing some companies from regulation. Unless these problems are fixed, harmful speculation will continue to fuel the devastating price volatility we are seeing on global food markets.”
Marc Olivier Herman, Oxfam’s EU policy advisor, said: Betting on food prices is unacceptable in a world where nearly 1 billion people are going hungry. The vote shows that there is a majority in the European Parliament in favour of limiting harmful financial speculation. However, the text adopted yesterday falls short of what is needed to tackle food speculation.”
Next steps on MiFID
The Ecofin council is expected to take a position on November 13th, after which negotiations will start between Parliament and Council as well as with the European Comission (trialogues). There is still a danger that the current text will be watered down due to pressure by industry. NGOs will continue to mobilise EU citizens to make sure that MiFID is used to stop food speculation.
