Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-07-08-Speech-2-380"
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"Madam President, Mr Vice-President of the Commission, the questions surrounding sovereign wealth funds have been perfectly summarised by Mrs Berès. I would like to add a number of other reasons why they are being discussed. Of course, they have taken off in recent years: according to the IMF, they generate between EUR 2 200 billion and EUR 300 000 billion today. However, we also need to look at their investment strategies, their transparency, the clarity of these strategies and, possibly, the emergence of new funds.
As regards Article 58, which you mentioned, Mrs Berès, it stipulates that the Member States have the right to put in place restrictions on grounds of public order or public security. However, as far as the Council is aware, this article has never been invoked in the context of sovereign wealth funds. In terms of the need to clarify this provision, I will simply point out that the Lisbon Treaty did not amend it.
In conclusion, the Council wishes to look at the European Union’s role in the international bodies. The Commission communication clearly demonstrates that we are actively participating and will continue to participate in the work of the IMF, the OECD and other bodies. As sovereign wealth funds have an international scope, it is clearly important for Europe to cooperate with the other recipient countries, on the one hand, and with the sovereign wealth funds and those responsible for them, on the other. The Union should thus play an active role in ensuring that the work in the multilateral bodies I mentioned moves forward, rather than simply following the discussions like a silent observer. That is why the Spring European Council supported the ideas put forward by the Commission. In particular, it explicitly set out its support for the current work to obtain an international agreement on a code of best practice, which the sovereign wealth funds would be free to adopt and which would set out the principles applicable to the recipient countries at international level. The European Council also added that the Union should endeavour to contribute to the current debate in a coordinated manner and it invited the Commission and the Council to continue the work in that direction. The Council fully intends to continue along that path.
As regards your final question concerning the link to oil-related financial issues, as stated today in the G8 we are all aware of the importance of the issues involved in reducing the global imbalances. Certain emerging countries, notably oil-exporting countries, have large surpluses. It is crucial that adjustments be made, particularly through adequate currency appreciation. These questions are naturally being very closely monitored in the G7-G8, but also by the IMF with, of course, the participation of the EU Member States.
In October 2007 the finance ministers of the G8 countries asked the IMF and the OECD to look into these issues. In response to these invitations both institutions got to work: the IMF focused on the countries responsible for the sovereign wealth funds while the OECD concentrated on the recipient countries. The IMF examined the funds’ current practices, organised a round table focusing primarily on these topics and set up an international working group composed of 25 countries that possess such funds with a view to drawing up a report, which is due to be published at the end of October of this year. The aim is to draw up best practices, which sovereign wealth funds would be free to adopt, particularly as regards transparency, investment strategies and governance. It should be noted in this respect that the Norwegian Government Pension Fund has been highlighted by many as the reference in this area.
As far as the OECD is concerned, emphasis has been placed on best practices for the recipient countries, and the OECD ministers adopted a declaration a few weeks ago. The work will now continue in the Investment Committee, which will focus in particular on peer monitoring of policy development and hold a wider debate on the investments controlled by foreign governments.
I will now move on to the Community dimension. As you know, in February 2008 the Commission presented a communication entitled ‘A common European approach to Sovereign Wealth Funds’. In its communication the Commission notes that new legislative measures at Community level are unnecessary, but it advocates a common European approach based on cooperation between the countries receiving the sovereign wealth funds, the funds themselves and those responsible for them, with a view to establishing, and I quote, ‘a set of principles ensuring the transparency, predictability and accountability of SWFs’ investments’.
The common approach recommended by the Commission should be based on five principles: commitment to an open investment environment, support of multilateral work, use of existing instruments, respect of EC Treaty obligations and international commitments, and finally, proportionality and transparency. It is important to note that the Commission communication is recommending the common European approach as a complement to the prerogatives of Member States regarding the use of their national legislation.
On 4 March the Council examined this communication and submitted a report to the Spring European Council. The latter took over the ideas set out by the Commission, clarifying two principles in particular. On the one hand, rather than expressing its support for the multilateral approach in general, it preferred to express its position specifically on the work under way in the IMF and the OECD, which I have just mentioned. On the other hand, rather than referring to the use of the existing instruments, and once again taking a more general approach, the Council thought it more appropriate to adopt as a basic principle the use of national instruments and EU instruments, if necessary.
So as not to leave anything out, it is important to note, too, that the question of sovereign wealth funds was discussed at the meeting of the Transatlantic Economic Council, with which Commissioner Verheugen is very familiar, held in Washington on 9 November 2007.
As far as national initiatives are concerned, it is true that certain Member States have already taken some or plan to do so. This also applies to other countries that are major recipients of sovereign wealth funds outside the European Union. Of course, such national measures should not contradict the common European approach advocated by the Commission on the basis of the principles I have just mentioned and supported by the European Council. The national measures must be envisaged in the context of a common European approach, which they should complement. I believe that that this corresponds to the concerns expressed by Mrs Berès.
Coordination of the national measures is one of the cornerstones of the common European approach proposed by the Commission. As you suggest, an analysis of the existing initiatives in the Member States will quite probably be necessary in order to establish effectively such coordination and ensure that it does not encroach upon national prerogatives and competences in terms of protection. This analysis of European practices could take its lead from the results of the peer monitoring that will be carried out by the OECD Investment Committee, as I said just a moment ago."@en1
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