The European Parliament will vote on proposals to curb food speculation in the Single Market next week. Three years ago, and following tough negotiations, the European Parliament and Member States agreed to establish rigorous rules against excessive speculation with food speculation and other commodities when they adopted the revised Markets in Financial Instruments Directive (MiFID II). In order to implement this political result, the European Commission and the European Securities and Market Supervisory Authority (ESMA) have developed detailed rules, called “regulatory technical standards”. These rules, which the European Parliament will vote on next week, are intended to implement the decision made three years ago. Next week the European Parliament will vote on the proposed rules. The proposed rules for curbing speculation on food stuff (“position limits”) still enable national financial regulators to set very high limits and their determination fails to take sufficient account of price volatility. The proposals also contain a very restricted definition of contracts (“OTC contracts”), which can be used for equivalent commodity trades. Thus, the proposed rules create a loophole for circumventing the position limit regime.
Before the technical standards can enter into force, the European Parliament can decide to have a vote on the proposals. If the Parliaments objects, the rules will not enter into force and the European Commission and ESMA will be mandated to redraft their proposals. Over the last few days we have received many emails from citizens expressing their support for strict rules to limit food speculation and for a rejection of the current proposals.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“We need tough rules to curb ruthless food speculation, not a paper tiger that is all for show with no real bite. The originally sharpened limits for food speculation must not be watered down. To regain citizens’ trust the EU must implement effective rules from which people will benefit. By allowing speculation on food prices at the expense of people and farmers in developing countries, Europe betrays its own values. In times of crisis, Europe must stick to its political and social foundations. Conservatives and Liberals only contribute to European citizens’ frustrations, if they push through measures that will not be effective.
It has been more than a year since the responsible MEPs wrote to the European Commission to explain that significant improvements were necessary to effectively curb food speculation. The Commission has not sufficiently taken our criticism into account. As the Parliament’s rapporteur, Markus Ferber (CSU/EPP) has lacked the backbone required to ensure effective measures. While Ferber initially criticised the Commission’s proposals, he eventually caved in without having achieved substantial improvements. Ferber buckled to the Commission. Despite what Ferber claims, a rejection of the proposed deficient rules would not block the implementation of the entire MiFID II Directive: the rules on commodity speculation represent only a small part of the Directive and could be corrected quickly if the Commission showed more political will.
The European Parliament must show that it takes its right of scrutiny seriously by rejecting the proposed rules. We are not an institution that exists simply to nod through Commission proposals, the Parliament’s effective right of scrutiny must be used.”
Please find the Green resolution for the rejection of the Commission’s proposals for the implementation to curb of food speculation, including propsoals to address these shortcomings here: https://sven-giegold.de/wp-content/uploads/2017/02/MiFID-II-RTS-21-draft-objection-Green-draft-final.doc
Please find the proposals for the implementation of the restriction of food speculation by the European Commission here: https://sven-giegold.de/wp-content/uploads/2017/02/COM-proposal-MiFID-II-RTS-21.pdf
Please find the letter of European Parliament’s negotiating team to the European Commission on MiFID II implementation and the need for revision of the proposed rules to curb food speculation here: https://sven-giegold.de/wp-content/uploads/2017/02/D51226_Hill_Regulatory-technical-standards-under-MiFID-II_MiFIR.pdf
Please find further information on activities of civil society on this vote here: