Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-04-24-Speech-4-045"
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"en.20080424.6.4-045"2
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Madam President, the subject matter of the report before us would seem, at first glance, to be highly technical. It concerns so-called accounting standards in the European Union and worldwide, particularly for small and medium-sized companies. It may very well be the type of subject that is discussed now in the European Parliament and then takes several years to begin to affect the economy and ordinary people. At that stage the cry will go up that nobody knows where these standards come from or who is responsible for them. Nor will anyone know why they have to be applied.
The objective is to achieve a single set of global accounting standards, particularly for public limited companies. We support that objective. The argument we hear advanced for it is that we need ‘high quality standards’, and this House considers itself the only forum empowered to set those high quality standards. However, in these times of turbulence on the financial markets, it is astonishing to hear the same people who previously argued for the principle of ‘fair value’ now questioning that principle and asking, too, whether a ‘market to market’ approach still makes sense if we no longer have a market. The very people who let the genie out of the bottle are the ones now asking whether we are on the right track.
The only people responsible for these standards are the people sitting in the offices of this private organisation in London, who are undoubtedly influenced in making their standards by the desire to keep themselves in a job. My report, on which we are to vote today, therefore concerns not just the impact on small and medium-sized companies, but also the fundamental question of who makes rules for whom, and who supervises the application of the rules.
The first issue to address is that of governance: how transparent is this organisation? In other words, how transparent is its funding? There are certainly hidden interests here. The members of this committee, who are demanding transparency and always try to portray the market as transparent, should make at least a modicum of effort to comply themselves with the transparency requirements they lay down for the market! My impression so far is that this organisation fights with every means at its disposal to avoid transparency in any form.
Who takes the decisions about financing and the choice of personnel for specific posts? Why are individuals appointed? Is it about regional balance? Is it about inter-sector balance? The current project concerns IFRS for small and medium-sized companies, so it is fair to ask who represents small and medium-sized companies. Who knows about small and medium-sized companies? And another thing: why are IFRS for small and medium-sized companies actually on the agenda right now? Who sets the agenda?
Commissioner McCreevy and Sir David Tweedie have also been asked many times, over a number of years, why we are actually doing this. Several years down the line we now know why we are discussing IFRS for small and medium-sized companies in Europe: it is because of requests from South Africa and Brazil. What a marvellous answer! We know quite well that the focus of all this is not South Africa or Brazil, but rather the European market, where there will be a lot of money to be made if SMEs are required to introduce something like this. So these are the issues at stake in the matter of governance – and some initial, positive steps have been taken.
But all the bodies that are to be set up in the future will be assessed according to whether the people who belong to this supervisory organisation and have to answer questions about it at political level – and they could include a Member of the Commission – will also have the power to shape new developments. It is not enough for them simply to be notified of proposals.
One of our aims is convergence. We must take care, however, that the interpretation of convergence does not slip from Europe’s grasp, to be replaced by the SEC’s interpretation. In Europe today we are sufficiently familiar with the way the US stock exchange is supervised. We should not be so naïve as to leave the business of supervision to the Americans. What we want is therefore what we have already called for: IFRS as Europe understands them and not as this board dictates.
Small and medium-sized companies are the ones affected here, and I have to say, without mincing my words, that the ideas on the table today are too complicated and too difficult. I would also warn against taking the voluntary approach. I am wearing my Bavarian national costume today and a good old Bavarian term comes to mind here: it is ‘
’ and it means something like ‘through the back door’. We know very well – despite all the denials and the acquiescence – that IFRS for small and medium-sized companies will be introduced to the European market through the back door, via a small number of Member States. We will then hear the same voices calling for a single set of standards, and they will proceed to foist their standards on the market – standards which are too complex, which nobody understands and nobody wants – purely because there is a market opportunity. What we have here is a case of a minority trying to impose its will on a majority at global level, and it is unacceptable!"@en1
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