Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-07-08-Speech-2-381"
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"Madam President, Madam President-in-Office of the Council, ladies and gentlemen, sovereign wealth funds have become major players in the global finance system and more recently have with good reason been attracting increasing public attention. In its aforementioned February communication the European Commission has therefore set out how, in our opinion, Europe should respond to this challenge.
Since the European Council meeting in March signalled its support for this approach the European Commission has been actively involved in the work of the IMF and OECD on the definition of best practices. Progress is being made in both these organisations. I can certainly say that a solution is now beginning to take shape and we have a well-defined and integrated European approach that we are now pursuing.
We should not forget that this is a bilateral process. It is in everyone’s interest to achieve clarity. For the funds themselves, this will mean stability and reduce the risk of setbacks. For those national economies in which the funds are investing, a stable, predictable and non-discriminatory framework will eliminate the risk of these important investors voting with their feet, in other words leaving Europe and investing elsewhere.
We intend to take the work of the IMF and OECD further. We have a strong consensus within the Union and this means we have a common approach. Member States have not opted to go it alone. In fact not one single Member State wishes to play a lone hand. This strengthens our argument and it is important that we maintain this whatever happens. With this kind of support we can expect our policies to carry a lot of weight and the Commission is confident that by the end of this year we will have concrete results of a positive nature to report to Parliament.
At its spring meeting the European Council unreservedly endorsed the approach being proposed by the Commission. The situation as it stands is simple: the European Union is the world’s largest exporter of direct investments and at the same time also attracts a lot of investment capital in the opposite direction. This is all very welcome. Investment and openness are two of the main driving forces for growth and employment in Europe. We cannot step back from our commitment to provide an open environment for investment.
Sovereign wealth funds did not just arrive on the investment scene yesterday but have in fact been investing in Europe for about 50 years. These responsible and reliable investors have pursued a long-term, stable policy that, moreover, has certainly stood the test during the recent turmoil in the financial markets. These funds have provided capital just when it was most desperately needed.
Neither do we at this time have any grounds for assuming that sovereign wealth funds are having a negative impact on exchange rates. There are no real indications that such funds are switching from US dollars to euros and, moreover, their order of magnitude is not yet on a level that would enable them to have a significant effect on developments in the international money markets.
The number and size of these funds is currently growing rapidly. Investment patterns are changing. Even the geopolitical map of those countries that are setting up these funds is changing. The scope and the quality of the information that the funds are making available to the market tend to differ enormously from fund to fund and hence the fear that the investment of these monies could give the foreign governments concerned excessive political influence, and that is a concern that we have to take seriously.
If the funds are transparent and comply with clear rules of accountability then the fact that they are State-owned investment vehicles should not give cause for concern. What we need is confidence in the purely commercial nature of their objectives, which means that transparency and corporate governance are the key factors.
The communication from the Commission sets out some of the options that are available. Regulation is scarcely the best response. All investors in the single market should have to observe the same regulations as they apply to competition, the internal market and employment law. The various instruments on foreign investments that Member States adopt in order to protect public security, law and order must abide by Community guidelines.
However, Mrs Berès, I would like to point out that Member States are entitled to adopt such measures and indeed most have been doing that for some time. The Commission will monitor this closely, though there are as yet no plans to carry out a detailed audit. Any review of investments in sensitive sectors at EU level also has to examine all investment sources, not just sovereign wealth funds. We are certainly in agreement that there are other types of fund that give more cause for concern than sovereign wealth funds and here it is not so easy to talk about transparency and corporate governance.
It is certainly correct to say that we cannot tackle a global issue by adopting a narrow European approach, but rather we need to seek an international and global solution. The Commission believes that the best answer would be a code of conduct that would be developed jointly at a global level by the recipient countries and by the funds themselves. A voluntary code of conduct that lays down basic standards for governance and transparency would ensure greater clarity in the functioning of the funds."@en1
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