Thursday

25th May 2017

MEPs move to curb speculation with food prices

  • Market games have seen food prices spike, affecting some the world's poorest people (Photo: etrenard)

The European Parliament has adopted a wish-list on rules for financial markets designed to curb food price speculation.

The EU law - which also looks to control sales of complex and risky financial products to naive customers - still has to be negotiated with member states.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

But MEPs in the economics committee on Wednesday (26 September) unanimously adopted draft changes to the European Commission bill by German centre-right MEP Markus Ferber for stricter rules on the sector.

Before the vote, Ferber said in a press conference that if he gets a big majority it will give him a political mandate for talks with EU countries aimed at sealing a deal by the end of the year.

Among the MEPs' demands is a "speed limit" on so-called "high-frequency trading" - software which buys and sells millions of shares per second based on small variations in prices.

If the parliament's proposal goes through, computers will not be able to trade shares faster than at a rate of 500 milliseconds per transaction so that orders are valid for at least that long.

Clear trading rules for complex financial products such as derivatives or bundled loans will also be put in place.

Lack of clarity over how many complex products were held by banks and investment funds in the 2008 bank crisis showcased the dangers of the status quo, which has seen taxpayers in several EU countries bail out "too big to fail" banks with billions of public money.

MEPs also want to ban local authorities from buying and selling complex products which they do not understand.

"In my country a number of local authorities are now bankrupt because of such speculation ... We want to protect taxpayers, not those who abuse markets," Ferber said.

One tricky part of the new regime is how to regulate trade in food products and derivatives (bets) on food prices, which have seen food prices spike across the globe in recent years.

MEPs envisage caps on how much an individual broker can trade over a specific period of time.

But development NGOs are unimpressed, saying the Ferber blueprint leaves too much room for traders to keep profiteering on the misery of hungry people in developing regions.

"The text adopted today 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," Christine Haigh, from the World Development Movement, a London-based NGO, said.

Portugal held up as symbol of EU recovery

Portugal to sail out of troubled waters after eight years of financial crisis, EU commission predicted, amid broad but "fragile" recovery in European economy.

Trade deal ratification needs member states, EU court says

The EU Court of Justice has ruled that the Singapore trade deal needs member states' ratification in its current form. It said that only investments do not belong under the EU's sole competence, potentially removing Brexit complications.

News in Brief

  1. Pressure grows on climate impact of EU timber harvesting
  2. US goes after Fiat Chrysler over emissions cheat
  3. Munich police break up Europe-wide burglar clan
  4. Report: VW threatened with €19.7 billion French fine
  5. Turkey begins mass trial of suspected coup leaders
  6. Merkel's CDU consolidates lead in polls
  7. France to host Russian president
  8. Switzerland votes against nuclear power

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms

Latest News

  1. Openness over Brexit is 'political play', says EU ombudsman
  2. Le Pen's EU group in fresh spending scandal
  3. New EU right to data portability to cause headaches
  4. Cyber threats are inevitable, paralyzing impact is not
  5. Transparency complaints keep EU Ombudsman busy
  6. EU sets out criteria for relocating UK agencies
  7. EU states back bill against online hate speech
  8. Dutch coalition talks collapse again