Verbatim report of proceedings

Tuesday, 8 July 2008 - Strasbourg

13. Sovereign Wealth Funds (debate)

  President. − the next item is the joint debate on the following oral questions:

– oral question to the Council by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the EU answer to the challenge of sovereign wealth funds (O-0067/2008 – B6-0164/2008) and

– oral question to the Commission by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the EU answer to the challenge of sovereign wealth funds (O-0068/2008 – B6-0165/2008).

  Pervenche Berès, author. − (FR) Madam President, Madam President-in-Office of the Council, Mr Vice-President of the Commission, thank you for giving us the opportunity to hold this debate with the two institutions concerned. I hope, Mr Verheugen, that you will be able to report back to Commissioner Charlie McCreevy on the nature of our debate.

For a long time we have had active sovereign wealth funds in Europe, primarily the Norwegian fund, and yet until now none of the actions of this fund had posed us any problem. Two new events have shaken up the current situation, however. The first is the constitution of important reserves by oil monarchies and countries that have accumulated trade surpluses that feed these sovereign wealth funds. The second event is of course the subprime crisis, which has shed light on the strategic role these sovereign wealth funds could play.

Previously, when these funds were used to invest here and there, particularly in the United States, their strategic character was called into question. Now, when we look at the role taken over by sovereign wealth funds from investment banks in terms of injecting liquidity or own funds, we realise that they have instead become investors of last resort.

In these conditions, emotions come into play, and that is why we wanted to ask this question. It is also undoubtedly why, unlike the Commissioner responsible for the internal market, the President of the Commission himself felt it useful and necessary to publish on 27 February a document that forms the basis of our discussions today.

We run the risk of seeing a strategy being implemented in each of the Member States that, at the end of the day, would not help to tackle the reality, which is that sovereign wealth funds have today assumed a responsibility, an active role in the capital market. As a result, this new situation to some extent places obligations on them and on us in the dialogue we wish to hold with the managers of these funds.

Therefore, on behalf of the Committee on Economic and Monetary Affairs, we would like to raise five questions today.

Firstly, we are of the impression that the Commission’s response up until now has been to say: ‘Let each Member State implement its own strategy, in terms of the transparency and governance requirements relating to these funds, and at Community level we will simply verify whether the requirements in each Member State infringe the rules of the Treaty or the rules on the functioning of the internal market’.

That does not seem to us to be the correct strategy. In our opinion, in a case like this we should instead be working towards a proactive approach and establishing coordination at Community level: on the one hand to prevent unfair competition among Member States – for it is clear that there is to some extent a race between the Member States to see who can benefit most from the sure, long-term investment capacities of these sovereign wealth funds – and, on the other hand, to define and work together on strategic or sensitive sectors that need to be preserved.

The second question relates to the problem of the registration of these funds. Would it be possible to envisage at Community level registering these funds, just as we are currently considering doing for rating agencies?

The third question concerns the interpretation of Article 58, which provides for restrictions on the free movement of capital on grounds of public order. As far as the Council and the Commission are concerned today, is there one interpretation that should take precedence in this area? We would like further details on this.

The fourth question is as follows: is this not a debate that has an international dimension? In our opinion, the European Union would be much better equipped and better prepared to tackle the international dimension of this debate if we had to some extent defined the position of our base camp, the position of the European Union, rather than the position of one Member State or another that might have rushed into this race, attracted by the financial possibilities.

The last question relates to the exchange rate. What is your view on the situation where the oil monarchies are currently investing in euro assets with funds from oil sales in dollars, thereby aggravating the tense exchange rate situation, with the resulting repercussions on our trade balances?

Madam President, Mr Vice-President, those are the questions the Committee on Economic and Monetary Affairs would like to ask and we look forward to the responses from the Council and the Commission.

  Anne-Marie Idrac, President-in-Office of the Council. − (FR) 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.

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.

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.

  Günter Verheugen, Vice-President of the Commission. – (DE) 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.

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.

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.

  Piia-Noora Kauppi, on behalf of the PPE-DE Group. – Madam President, I completely agree with the Commission and Council assessment on sovereign wealth funds. They are the trend of the 21st century and this debate is very welcome.

These funds have become more visible again in a time of financial crisis involving multiple banks and investment firms as they stepped in to provide much-needed capital injections to some of these firms.

Sovereign wealth funds are predicted to grow at an increased rate in the near future, which should not scare us. This is a natural part of market development. The capital that sovereign wealth funds bring to the global market is needed to keep investment flowing. They have the capacity to provide liquidity to the financial market and to companies. This is sometimes vital to their survival.

Due to their size and resources, sovereign wealth funds are able to invest where funds are sometimes desperately needed but where others cannot or will not invest.

In theory, like any other investment funds, also SWFs seek good yields from sound investment which moreover tends to be long-term. They do not a priori pose a threat to global financial markets or the European economy; rather they are very beneficial to it.

While there is some concern today with the rising economic power of some oil-rich countries as well as countries such as China and the implications of this, the response to this unease should not be the exclusion of these countries from global financial and investment markets. On the contrary, Europe should welcome the inflow of funds coming from these states and their investment funds.

Naturally the fact that some of these countries are not abiding by the same basic principles with us politically is a cause for some concern. If political objectives drive their investment strategies – however, this has not been the case – there is no evidence that sovereign wealth funds would have caused any major crisis. They have operated in a sound manner without political interference. It is both counter-productive and against the principles of good regulation to discriminate against all SWFs based on their origins.

The basic principle of financial markets and corporate governance regulations should be the same treatment of all actors involved in similar activities. Of course the code of conduct would be welcome but it should be based on this undifferentiation of the source of income.

  Elisa Ferreira, on behalf of the PSE Group. – (PT) Opening up to trade and investment is a hallmark of European integration. Sovereign wealth funds have been around for a long time. In the current context of serious economic problems, as has been said, their capitalisation potential and the interest in this potential have increased. The opening up of strategic sectors and the assignment of essential public assets to private initiative is another characteristic of the European Union. However, it is important to guarantee that all operators, and sovereign wealth funds in particular, are guided by clear and transparent rules and that their objectives are compatible with the proper functioning of the markets, with fair competition between operators and with both short and long-term protection of the rights of European citizens.

We welcome the Commission’s commitment to a multilateral code of conduct, under the aegis of the International Monetary Fund. However, as is happening with hedge funds and private equities, a code of good practice is not enough. We would ask the Commission for an independent and much stronger guarantee that, in the internal market, the principles of transparency and governance will be duly respected by all financial operators, including these funds, based on European and not solely national or international criteria.

  Wolf Klinz, on behalf of the ALDE Group. – (DE) Madam President, ladies and gentlemen, sovereign wealth funds have increasingly become the topic of conversation in recent months because they have been dealing in the European and US banking sector. Many believe that this involvement is just the first step and that sovereign wealth funds are now lining up for a massive shopping spree that will end with many companies in Europe and possibly elsewhere too coming under their influence or even under their control. Here the fear of political influence is mingled with the anxiety that at the very least an attempt might be made to gain access to technologies that would otherwise not be accessible, especially since we are now dealing with partners and market players that have not previously been active on the international stage, namely sovereign wealth funds from Russia and China.

The money is certainly there. With more than USD 3 billion to hand these operations have now twice as much under their charge as the international hedge funds. However, from a historical viewpoint it has to be said that there is no evidence to support this assumption. The funds – as has already been pointed out – have so far always proved to be good shareholders. They are interested in the long-term, positive development of their business and hence in obtaining a good, long-term rate of return on their investment.

Nevertheless we should not be wide-eyed and naive as we watch these events develop. We need a set of rules, but we do not want to have isolationism or protectionism, for sovereign wealth funds are, after all, an example of the fact that the free capital market is working and it is in our interest that this remains so.

We Liberals therefore support the Commission in its approach and in its call for a code of conduct and we hope that such a code will really bring transparency, that the basic motives for the investment of these sovereign wealth funds become clear and that the funds themselves apply good corporate governance and stick to it.

However, we need an EU-wide solution – not 27 different EU solutions – and we need an international solution too. I therefore welcome what the Commissioner has said, namely that intensive talks are now under way with the OECD and the International Monetary Fund.

Over the years the free movement of capital has contributed to growth in Europe and in the world at large. We must not endanger this in the future through overregulation and protectionism but rather should abide by our free market principles.

  Cornelis Visser (PPE-DE). – (NL) Sovereign wealth funds have been active on the financial market for more than 50 years. The funds in sovereign wealth funds have increased enormously in recent years in, for instance, China, Russia and the Arab states.

The purpose of sovereign wealth funds is to invest surplus state reserves to yield profits. These countries may well, I think, be entitled to seek the best way to invest their reserves in foreign currency, so I take a positive view on the contribution of these funds. The funds improve the liquidity of the financial markets and create growth and jobs. They also contribute to investment for the longer term. They create stability for the companies they invest in. We should, therefore, continue to allow them the scope to invest. These funds can, however, bring threats along with them too. We will have to look at the type of investments they are making and whether they meet the requirements for transparency.

There is still not complete clarity about the political involvement in these sovereign wealth funds. The disadvantage of this lack of transparency is that it can result in growing uneasiness on our part about these sovereign wealth funds. The Commission should, therefore, take action and that is a good thing. Otherwise countries will deal with these sovereign wealth funds at a national level. I am against too much national policy on this. Europe is the right level to respond to this and we should have a common response.

It is important to have a coordinated position at European level. I am pleased, therefore, with the response of the Council and the Commission to collaborate closely at the level of the IMF and the OECD. I look forward to seeing the guidelines that the IMF, the World Bank and the OECD develop and I hope that they will incorporate transparency, good governance and reciprocity.

When it comes to reciprocity, I take the view that we should confine ourselves to the sovereign wealth funds. We always want private investors, but we can require reciprocity from sovereign wealth funds.

  Antolín Sánchez Presedo (PSE). – (ES) Madam President, more than 30 countries have set up sovereign wealth funds within the last 50 years. Their growth in recent years is due to foreign currency from oil and trade surpluses, and certain countries are now even looking at how they can be used to prop up public pension systems.

Sovereign wealth funds can make a global contribution to financial stability, as we have seen, and also to economic growth in order to ensure solidarity between generations.

They can also lead to problems and distortions. That is why we need a common European approach and to ensure that they operate with transparency, predictability and sound governance. We must prevent conflicts of interest, and the paradox whereby European sectors whose efficiency was entrusted to market logic again become a matter of public discretion; this time, however, it is the discretion of third countries. Not only must we ensure coherence and reciprocity; we must also reflect on this issue and move forward in terms of laying down some international rules.

  Olle Schmidt (ALDE). – (SV) Madam President, Commissioner, I am a fervent advocate of free trade and am allergic to protectionism, but that does not mean that I am naive. One of the problems of state-owned funds is their enormous growth. Since February this year alone, their assets have risen by 600 billion dollars to approximately 4 trillion dollars, i.e. 4000 billion dollars. What power! This, combined with the fact that many of these funds do not have adequate transparency, which has been mentioned, as regards their investment practice and that some of them originate in non-democratic countries, I think indicates that we should be interested.

The funds are needed, the investment is needed, but we need rules of play and regulatory systems applicable to all, under which transparency must be exemplary. The Norwegian Oil Fund is, I think, an example which has been mentioned in this debate. It should also serve as a model when the code of conduct is drawn up. Madam President, when the sun shines we do not need umbrellas, but when it rains we may well need them.

  José Manuel García-Margallo y Marfil (PPE-DE). – (ES) Madam President, I will do my best not to repeat some of the comments already made. I must, however, point out that the first time I heard of sovereign wealth funds was the 1993 ‘KIO scandal’ in Spain, which, according to the Kuwaiti authorities of the time, caused more economic damage than Saddam Hussein’s invasion in 1991.

Other names have emerged since then. We have already talked about Gazprom, Chinese activity in Africa and Venezuela’s use of the funds to export the Bolivarian revolution, and we will be talking more today as a result of the financial crisis. Many companies are being bought up or receiving financial assistance through these funds.

As Mrs Kauppi said on behalf of my group, it is true that the funds have some unquestionable advantages: they help improve allocation of resources, they inject liquidity and reduce volatility, and these are all very useful at this particular juncture.

Some of the concerns aroused by the funds have also been mentioned: more extensive government intervention in economies, intervention that may occasionally be dictated by political rather than economic objectives – which can lead to market distortions and threats to national security – and the national reaction of each government, which could further fragment the internal market.

To paraphrase Lenin, what is to be done? Obviously we must continue to investigate how these funds operate and produce an accurate diagnosis of their workings, and the Community framework must be reviewed. It is true that they are subject to rules on competence and investor protection, but is this sufficient? We must also come up with a voluntary code of conduct to guarantee transparency, predictability and accountability. Finally, the code of conduct ought to be exported to the international framework.

I thus extend a hearty welcome to transatlantic cooperation and cooperation with bodies such as the OECD and the International Monetary Fund. Action must be taken, and it must be taken soon.

  Ieke van den Burg (PSE). – Madam President, I share the concerns expressed here by many speakers about state-owned funds, but I would like to stress as well that private commercial funds, such as hedge funds and private equity, are of even more concern. This is because they often do not have a long-term-oriented focus, whereas sovereign wealth funds, together with pension funds, often have this long-term orientation and can strengthen the role of minority shareholders, as well as having a positive role in providing the market with liquidity.

The point is that they are often not transparent enough in their investment strategy and intentions, and I hope that the Commission will focus on this. The Committee on Legal Affairs recently adopted a report in this Parliament on the transparency of institutional investors, and there we asked the Commission to come up with a directive guaranteeing common standards of transparency. I hope the Commission can react to this request.

My last point is about the code of conduct and the ‘comply-or-explain’ procedure. Is this also an element which the Commission has considered?

  Harald Ettl (PSE). – (DE) Madam President, sovereign wealth funds have come into the spotlight, especially since last year when China declared its intention to invest USD 3 billion, only USD 3 billion, of its fund reserves in private holding companies. The capital held in sovereign wealth funds now totals well over USD 3 trillion, which is twice as much as that held in hedge funds: reason enough for us now to look into this whole business. So far we only know of a transparent Norwegian system that operates good governance. However, just like private venture capital, sovereign wealth funds can cover up exactly who the entrepreneur is.

Sovereign wealth funds can invest strategically and can grow rapidly. Transparency is therefore urgently required. Employee rights can be restricted and employment conditions altered as a result of corporate transfers that have been influenced by sovereign wealth funds. Transparency and due notification is therefore needed in this area. Another point worthy of mention is that the IMF, the US Treasury Department and the German Chancellor are calling for increased controls and regulation. It certainly seems that we need to do something.

  John Purvis (PPE-DE). – Madam President, I would caution my colleagues against demonising sovereign wealth funds, let alone, Mrs van den Burg, private equity investors. Recycling surpluses is highly desirable, whether by spending or investment. The 1930s Depression was the result of hoarding by surplus countries. Much better that these surpluses are recycled as investments to where they are needed – to our banks with their capital shortfalls, to our infrastructure needing modernisation, our real estate in its current difficulties and our business and industries in general to create and preserve jobs.

Yes, we need reciprocity, but the EU is the biggest investor internationally anyway. This must not be an excuse for protectionism to keep out other investors. Surely we have our competition policy to deal with cartels and monopolies. We have our labour and health and safety rules to protect our workers, and, as a last resort, we have our sovereign right to legislate against unacceptable political interference. Do not look gift horses in the mouth!

  Zsolt László Becsey (PPE-DE). – (HU) Just a few things in brief. We are heterogeneous – for example, I come from the new Member States, and am the first person from there to speak today – poor in capital, with a defenceless public sector and a very unhappy past, which threatens us with its return in an imperialistic manner. And everybody must take this seriously.

The second thing, which has been discussed here, is that these sovereign state funds very often serve imperialistic goals, and not only in medium-term investments but also in the world’s energy sources; look at China’s shopping in Africa. It is therefore not certain that this international agreement or code of conduct alone will be enough.

After the relevant analysis, we must think long and hard about whether some Member States are taking national security measures on a uniform basis that would prevent foreign bandit investments in strategic sectors, and that this would not act against the free flow of capital but would still mean some security. Thank you.

  Margarita Starkevičiūtė (ALDE). – (LT) I would like to point out to my fellow Members that perhaps we should not spend so much time on foreign funds but rather concentrate on our own, as Mr Purvis has said – we are investing too much in third countries and are losing money; therefore, we need wealth fund investments. Perhaps we should organise our economic policy in such a way that our citizens’ savings could be safely invested in Europe, then we would not have to worry about third-country wealth funds.

I would like to finish by thanking the French Presidency for finally coming to listen to our debates. Slovenia is a much smaller country, but I could not help noticing that its representatives have always taken part in parliamentary debates. The representatives of France, however, France being a large state, have not yet been very active and I do hope that these debates will encourage them to participate more actively in our sessions.

  Ieke van den Burg (PSE). – Madam President, thank you for giving me the floor again. It is because Mr Purvis is saying that we might be demonising sovereign wealth funds and private equity and hedge funds, and I do not think this is the case.

We also chose a very balanced approach in the oral question as it was tabled and in the resolution and I think it is wise not to ignore or deny that it is important for us as a Parliament to take account of what is happening in this field. I think it is our duty, it is our right to do this, and I would not like to see this set aside as mere demonising.

  Anne-Marie Idrac, President-in-Office of the Council. − (FR) Madam President, Mr Vice-President of the Commission, ladies and gentlemen, I am struck by the consensus that has emerged from your speeches, which I could summarise as follows: neither demonisation, nor naivety.

We have all heard the comments by Members that we obviously must not dissuade the sovereign wealth funds from being put to good use, and various uses were described for European prosperity. Nevertheless, there was agreement on a number of political principles that should prevent us from being too naive.

They are the principles of transparency, fairness, predictability and reciprocity. These contributions from Members will certainly help us to continue the work in the Council and in the Commission with a view to drawing up a code of conduct. It is extremely encouraging and important that the Members highlighted the need for coordinated work between the Member States, and from that perspective I wanted to say that it is very satisfying to hear the eurozone countries speaking with a single voice since they are capable of upstream coordination and coordination with the ECB.

  Günter Verheugen, Vice-President of the Commission. – (DE) Madam President, ladies and gentlemen, I really want to thank you once again for the broad support you have given to the Commission’s approach in the course of this debate. I did perceive some differences in priority, but not in the political stance and for that I am particularly grateful.

Someone asked how this work is proceeding at international level. Let me just say that while the activities in the IMF and OECD are running in parallel they are not dealing with exactly the same themes. They could more be described as complementary. The Working Group in the International Monetary Fund, which meets monthly, is attempting to establish how the conduct of the sovereign wealth funds themselves can be influenced in the ways that we have been discussing. The OECD Working Group, on the other hand, is seeking to determine how we ourselves should behave in response to the influence exerted by sovereign wealth funds.

This subject is being tackled from two sides and once again I can say that the progress made to date has been satisfactory. We are quite confident that we shall really achieve something and that – to pick up on what Mr Schmidt said – we will indeed have an umbrella, should we need one.

  President. – To conclude the debate, I have received one motion for resolution pursuant to Rule 108(5) of the Rules of Procedure.

The debate is closed.

The vote will take place on Wednesday, 9 July 2008.

IN THE CHAIR: MR DOS SANTOS
Vice-President