Verbatim report of proceedings

Thursday, 25 October 2012 - Strasbourg

21. Innovative financial instruments in the context of the next Multiannual Financial Framework (debate)

  President. − The next item is the report (A7-0270/2012) by Eider Gardiazábal Rubial, on behalf of the Committee on Budgets, on innovative financial instruments in the context of the next Multiannual Financial Framework (2012/2027(INI)).

  Eider Gardiazábal Rubial, Rapporteur. − (ES) Mr President, Commissioner, here we are again, for the third time, in this House. If you will allow me, I would like to begin by thanking all the shadow rapporteurs and rapporteurs for opinion for the work they have done to contribute to this report.

There are three fundamental reasons why innovative financial instruments are an essential tool for helping us to get back on the path towards smart, sustainable and inclusive growth:

Firstly, because since the mid-1990s, public investment has been constantly declining in the European Union and, moreover, this trend has worsened with the eruption of the financial crisis in 2008.

Secondly, because project promoters and SMEs are faced with an increasingly restrictive market and do not have access to credit or to the capital markets.

Thirdly, because according to the Commission’s own estimates, implementing the Europe 2020 strategy is going to require EUR 1.6 billion.

Thanks to the financial support provided by these instruments, we will help to increase the volume of investments in projects that we consider to be strategic for the development of the EU and which otherwise, due to market failure or sub-optimal investment situations, would not have received that funding. In addition, the application of financial instruments will help to ensure that finances serve the real economy and benefit projects with added European value.

The European Union has been using these instruments since 2000 and, with the experience acquired since then and the evaluations that we have, we can improve the design for the future.

We believe that we need to restrict the number of instruments and extend their scope of application: in this way we are going to improve their visibility for actors, we will expand their critical mass and diversify the risk thanks to a portfolio approach. In addition, the creation of equity and debt platforms will simplify and give greater coherence to the instruments. We also need a simpler, clearer and more transparent legal framework that does not increase the administrative burden on intermediaries and recipients and which is attractive to public and private investors.

Another requirement that we consider to be fundamental is that these instruments be flexible and that therefore they have the capacity to adapt swiftly to change. We therefore ask that the budgetary authority, in other words Parliament and the Council, have the opportunity to adjust the amount allocated to each instrument according to needs and its use.

In general terms, I think we can say that both Parliament and the Commission agree on the importance of the financial instruments and on the characteristics that they need to have, but we do not believe that the proposal responds to all the needs: these instruments are going to have a very positive effect, but unfortunately that will be in the short and medium term, and we need to seek a long-term response.

We know that there are massive savings seeking secure, reliable financial products for investment. We need to be capable of mobilising those savings in order to be able to finance projects in the medium and long term that generate sustainable development in the European Union.

Therefore, in this report I call on the Commission to work on proposals that can connect those savings with the investment needs, and I also ask it to work on a legal and regulatory environment that is conducive to their development, especially with regard to rules on long-term investments under the prudential rules Basel III and Solvency II. I do not know whether, in his speech, the Commissioner can tell us something now about the Commission’s work in this respect, but I am sure that the idea will be raised during the debate.

Finally, and although the Council is not with us, I would like to ask it to join with Parliament and the Commission because our proposals are along the same lines.

  Janusz Lewandowski, Member of the Commission. − Mr President, honourable Members, not for the first time today, I have no ministers today at this time. On behalf of the Commission, we welcome your report and we really appreciate the efforts of the rapporteur, Mrs Gardiazábal. Gathering wide support for your report is a test of your skill, and we need the commitment of Parliament to the enhanced role of financial instruments in the next financial perspective (2014-2020) for a very simple reason. We are under huge constraints and should try to get as much as possible out of each euro of the European budget. We therefore need this multiplying effect of the other financial instruments.

You are right that is not a replacement for the budget; it is a multiplying effect of the budget. But it cannot be seen as a strategy to reduce the budget or to replace the grants by loans. Of course both are needed, and this is our message to the Council: we need multiplying effects, given the gap between the needs and what is possibly available as our resources. But this is not a replacement for the real budget, nor is it replacement by loans and revolving funds of the grants, which are the essence of the European budget. Why do we need them? Because the gap is visible; because we see, in a time of crisis, a sort of risk aversion – but it is mainly about banking. Banking is three-quarters of the financing in Europe, which is the opposite of what happens on the other side of the Atlantic where three-quarters comes from the capital markets.

In Europe, this is mainly about the banking system, and under the credit crunch – under present-day circumstances – there is especially a high-risk aversion towards long-term projects in infrastructure. Therefore we need the involvement of the European budget to reduce the risk, to reduce the risk aversion and to finance long-term projects, especially in transportation, energy and telecoms. We will test the water now via these pilot projects.

I am happy to inform you that we are about to sign an agreement with the European Investment Bank and to launch some interesting pilot projects under the present Financial Perspective (2007-2013) – again, fully in compliance with a statement in the report that it should be governed by very strict legislative budgetary rules. Before authorising the launch of a financial instrument, the Budgetary Authority should be fully informed and, by means of ex ante evaluations, should also be fully involved in monitoring the projects and final reporting.

That is why we need flexibility, which was also a point in the report. Flexibility is needed to adjust to the fluctuations of the market and to the local environment in many countries of the European Union. Therefore, there is a need for the enhanced role of the financial instruments, which is absolutely necessary to fill the gap between what we need for Europe and possibly restrained financial resources in the European budget. Thank you for your cooperation. We are on the right road and this is the road to recovery, supplementing financial austerity with real growth prospects for Europe.

  Jean-Pierre Audy, rapporteur for the opinion of the Committee on Budgetary Control. − (FR) Mr President, Commissioner, my first words will be to give apologies on behalf of Ms Ivanova, detained by other Parliamentary activities, who has entrusted me with summarising for you the report of the Committee on Budgetary Control.

Our committee recognises that financial instruments are useful in creating multiplier effects and leverage effects, such as guarantees and tolls. However, we draw your attention to the recommendations of the Court of Auditors and its 2010 opinion on ownership of instruments, risk-taking, accounting, transparency and reinforcement of EU staff capacity to operate them.

The second point concerns links with financial markets. We think that these instruments should only be used when there is no offer from the private sector, so as to avoid any distortion in financial markets.

Lastly, speaking personally, I am sorry that the idea of introducing an obligatory user contribution was not explored, in particular for trans-European transport networks that need financing, particularly those are not immediately profitable.

  Antonio Cancian, rapporteur for the opinion of the Committee on Industry, Research and Energy. − (IT) Mr President, ladies and gentlemen, any line of argument should be based on the observation that the Commissioner made earlier, namely that the budgetary resources available are very inadequate, and so the meagre resources that we do have cannot be used just as grants, but should be used within ‘innovative financial instruments’, special funds, project bonds and so on, which should of course be developed.

They should be developed within the system of public private partnerships, or PPPs, which will contribute towards the implementation of individual funding projects, leading to the creation of infrastructure, both physical and virtual, as part of sustainable projects. If this is done, it means that we can go even further and issue bonds because, if the projects are sustainable and reach a point where they break even, they are no longer debts but turn into long-term loans. In my opinion, Commissioner, that is where real growth lies, and we have to be bold enough to go beyond the budget.

  Mojca Kleva, rapporteur for the opinion of the Committee on Regional Development. − (SL) Mr President, financial instruments within the EU represent financial support from the Union budget in the form of loans, securities, investment in capital and other risk-related instruments.

Transparent and flexible use of financial instruments while participating in the private sector can certainly accelerate and boost the flow of investments throughout the European Union at a time when, owing to the current paralysis in the banks, there would otherwise be no investments.

I would like to thank the rapporteur, Ms Gardiazábal, because she, in essence, also included in her final report the majority of the amendments suggested by the Committee on Regional Development.

I would just like to focus on a few points that are important in the use of financial instruments regarding cohesion policy. These can in fact have a significant role in achieving cohesion policy aims, because they allow more efficient use of public-sector funds.

We have been aware of financial instruments in cohesion policy for some time now. Their increased use, as proposed by the European Commission, may ensure more effective cooperation of the private sector in European investments in the next seven-year budget period and thus actually assist in securing financing for strategic regional investments.

It is important that when promoting the extension of the application of these instruments, which over the next seven years may be used in all Structural Funds and cohesion funds and for a variety of purposes, we secure legal clarity, transparency and a simple system.

We need a very clear legal framework that is set out on time, definitely before the start of the new programming period. If we wish to promote the success of financial instruments, we must also improve and reinforce knowledge and technical capabilities regarding instrument use both at administrative level and among financial intermediaries, banks and end users.

Last but not least, it is important that in view of future, ever increasing, financial instrument use in all European policies, we provide a clear overview of all the risk-related mechanisms which come into effect with financial support from the EU budget.

  Dominique Riquet, on behalf of the PPE Group. – (FR) Mr President, Commissioner, ladies and gentlemen, I first of all want to praise the work done by Ms Gardiazábal Rubial, who has shown a very good grasp of the subject and an excellent spirit of cooperation.

Development of innovative financial instruments, as proposed by the Commission, must be supported, since it allows finance to be placed at the service of the real economy and the growth and jobs goals that the EU has set itself, despite a context in which national public finances are being consolidated. It is indeed, therefore, as emphasised by the Commissioner, a powerful budgetary lever to serve our projects.

I want to make a few comments. Firstly, viable projects that do not receive sufficient financing from the market must benefit from these instruments as much as possible, in order for subsidies to be reserved for projects that generate less income.

Secondly, we must ensure visibility of the EU budget, which risks being weakened as a result of the complex processes which these instruments entail, particularly since the general public’s knowledge about the role played by the European budget is not all that good. We should not lose ourselves in the mysteries of these arrangements.

Thirdly, a balance must be found between the necessary control by the budgetary authority over the use of European funds and the flexibility that enables these instruments to adapt to economic circumstances and attract investment.

Lastly, by way of conclusion, I would like to emphasise the part these instruments play in the prospects for developing capital markets in Europe, but also the importance of a ban on linking these instruments to complex products.

  Göran Färm, on behalf of the S&D Group. – (SV) Mr President, many thanks in particular to the rapporteur, Ms Gardiazábal, who has done a great deal of work in connection with this very heavy subject of the future. This is a superb report. The economic future of Europe must not simply concern emergency measures to combat the crisis. It is equally about boosting the economy in the long term and increasing investments that have the ability to create growth.

The crisis is not simply a consequence of the banking and financial collapse, but has also been made worse by a long-term fall in the rate of investment. This has worsened since the crisis, and we are now down to dangerously low levels in terms of investments. At the same time, the need for investment is enormous, as has been pointed out by the rapporteur.

The problem is that the current tough restrictions for both the EU budget and the national budgets and more stringent capital adequacy requirements for banks etc. mean that we cannot produce any money without finding new ways forward. There are financial instruments, including project bonds, which last summer we agreed to test during a pilot phase, which was partly based on my own report. Loans from the EIB guaranteed by the EU’s budget will allow us to ensure that project companies can issue bonds that are more secure and more attractive, so that pension funds, for example, can focus on infrastructure projects instead of allowing the money to sit in various accounts.

I am very pleased to hear that the Commissioner has now announced that work is already underway to bring specific projects to the table and sign contracts. The idea is that the pilot phase will be evaluated. We must see if perhaps in future we can raise even larger sums for the coming years, and perhaps also try other models with even greater potential.

In any case, I believe that this new financial instrument is required if we are to lead Europe away from austerity and recession and back to sustainable growth and job creation.

  Anne E. Jensen, on behalf of the ALDE Group. – (DA) Mr President, for some time the Group of the Alliance of Liberals and Democrats for Europe has wished that the EU budget would not simply give out subsidies, but would also promote specific policy through loans and guarantees, and through new financial instruments. We have actually been working towards this for many years, and we are therefore very pleased about the announcement made by the Commission. There are many good ideas, and I think that it is worth reminding people that in the European Investment Bank we have achieved genuine success – a genuine European success story. In these difficult times, it is a good idea to remind each other that we also have success stories.

We must acquire more capital in order to carry out projects within areas such as research, innovation and transport infrastructure. Consequently, there are widely differing areas in which it is possible to raise money via the markets with the aid of the EU budget, and, as many people have pointed out, we can in this way have a far greater positive effect on our competitiveness, on our growth, on our employment, and that after all is ultimately what it is all about.

The Commission is proposing a very broad range of instruments, and the Commission has adopted the right approach in that regard. However, it has not been said that the new financial instruments could replace the subsidies, or that the EU budget could be reduced by the same amounts, a point which has also been emphasised by the Commissioner.

I would also like to emphasise the example we have with project bonds for which a pilot project is now underway – and I am glad to hear that that is the case – where EU guarantees will make it possible for major transport and energy projects to be financed as cheaply as possible on the lending market through the issuing of bonds. Such a lending market currently exists in the USA, where pension funds and other institutional investors can invest their money in infrastructure and thereby have a secure liquid investment with a reasonable rate of return.

The intention of the pilot project is after all to test: is there any interest in such a market in Europe? This can be started up and, over the course of a number of years, we could end up with such a market in line with the USA, such that we can overcome the problem of national treasuries being empty, and having no opportunity to finance transport infrastructure via national treasuries.

However, not all types of project will generate this level of interest; therefore there must still be subsidies. Overall, I would like to say: we firmly back the Commission’s proposal; it constitutes a limited expense for the EU budget, and there is no risk that we will be liable for any more money than has been allocated in the budget; thus it makes good sense. Thank you!

  Tomasz Piotr Poręba, on behalf of the ECR Group. – (PL) Mr President, Commissioner, there is no doubt that the development of innovative financial instruments may lead to an increase in public investment in the EU, where a decline has been seen since the mid-1990s. Innovative financial instruments should implement the political objectives of the European Union, respect the principles of proper financial management and supplement such traditional instruments as subsidies. They should be aimed at making it easier to implement projects, they should have a set completion date, and they should also give rise to an increased contribution of private capital for projects in the public infrastructure sphere, where they may serve as a guarantee of optimum utilisation of financial resources. One thing that will be of considerable importance in this area is a simple legislative framework which does not constitute a burden on intermediaries and beneficiaries, but causes these instruments to be attractive to both public and private investors.

There is a concern, however, that innovative financial instruments will be utilised solely in short-term investments pitched at turning a quick profit, and will not be applied in the implementation of projects which provide intelligent and stable economic development out of concern for there being too great a risk and as a result of a lack of public funds.

  Paul Murphy, on behalf of the GUE/NGL Group. – Mr President, the backdrop to this report is the collapse of investment all across Europe. Public investment has been slashed as a direct result of the neo-liberal and austerity policies pushed by all of the major groups inside this Parliament, and by the Commission. But in addition private investment, as a percentage of GDP, has collapsed to the lowest level ever in the history of capitalism, and that is despite the increase in profits in Europe over the past three years. So instead of investing this wealth, they are choosing to hoard it or to speculate, to gamble with it on the financial markets.

That strike of capital is precisely why society must not accept them having the say over investment happening or not happening, them holding society hostage. But the response of the Commission is yet more reliance on these profiteers attempting to leverage public money with things like project bonds. The answer is not so-called ‘risk sharing’ with the private sector, where the private sector gets the profits and the public sector gets the risk, it is to reject the logic of the profit system.

Massive and direct public investment is needed. There is no absence of funds in Europe. There is no poverty of overall resources in Europe: the rich – the major corporations – hold EUR 3 trillion that are being hoarded at the moment. The point is to take that wealth through the likes of a capital tax and invest it to create jobs and provide infrastructure.

  Ivailo Kalfin (S&D). - Mr President, I want to add my congratulations to those of everyone who has already congratulated the rapporteur. I think that Eider Gardiazábal Rubial did an excellent job and I hope that many of the conclusions and recommendations of this report are going to be taken on board by the Commission and by the legislative bodies as well.

We have said several times that these financial instruments are much needed because they increase the effectiveness of the European budget, but they are not here to replace the European budget. Currently, only a little over 1% of the European budget is involved in financial instruments. So far, we have good practice and we have to review that and to develop it in the future.

These financial instruments have a limited use. Normally they can be used for commercially attractive projects as a means of rectifying market inefficiencies, for suboptimal investments and to create leverage for the European funds, but again we are talking here only about long-term investments. I would point out that there are very good examples of financial instruments being used to support research, innovation and small and medium-sized enterprises, and I think we have to build on these achievements.

We need – and I very much support what is said in the report on this point – fewer and better-focused financial instruments, and we do not need to over-regulate them. We should improve ex-post transparency and ex-post control but we cannot determine all the characteristics of the financial instruments in advance because they would not then be used properly.

Lastly, there are three things that I very strongly support: the work on the creation of standardised platforms, where European money can be combined with private money; ongoing and permanent work on the blending of funds from the European Union and from private and other public investors; and the use of the reflows coming back from the financial instruments for the same purposes.

  Ricardo Cortés Lastra (S&D). - (ES) Mr President, I would also like to start by congratulating the rapporteur, Ms Gardiazábal, on this report, which sends out a strong message.

At a time of budgetary restrictions, recourse to the promotion of innovative instruments is key to achieving the effect of multiplying the EU budget’s effectiveness. Those of us who are working for the future of the EU’s cooperation policy are deeply concerned by the cuts to the multiannual financial framework that could be on the horizon, meddling that is rejected by 425 million citizens, who describe the European cooperation policy as efficient and necessary, and therefore as having a future.

Development cooperation requires innovative mechanisms, such as joint funds, but according to predetermined standards. We support involving the private sector, but while ensuring transparency and accountability. The next multiannual financial framework must equip the current Financing Instrument for Development Cooperation and the new financing mechanisms with appropriate funds, because aside from generating poverty, the cuts are costing lives.

It is also essential that part of the tax on financial transactions is allocated to international cooperation.

Catch-the-eye procedure

  Elena Băsescu (PPE). – (RO) Mr President, I too would like to welcome the Commission’s proposal to increase the use of innovative financial instruments. Their introduction has been beneficial and has enabled the Union to stimulate investment in the real economy. Their visibility needs to be improved to make it possible to achieve the Union’s strategic objectives.

I would underline the fact that the continued development of innovative financial instruments will help to achieve smart, sustainable and inclusive growth. However, the increase in the number of instruments is posing many challenges in the areas of regulation and governance. In this context, the legal framework plays a particularly important role, and it must be as simple and as transparent as possible.

At the same time, I would highlight the fact that we need to ensure that innovative financial instruments are attractive to public and private investors.

  João Ferreira (GUE/NGL). - (PT) Mr President, in the first half of the 1990s, the European Commission carried out various studies suggesting minimum amounts for the Community budget so that the objective of cohesion could be guaranteed. These studies said that a budget of at least 2 % of the European Union’s GDP was necessary. Commissioner, dig around, you might find them in a forgotten-about drawer somewhere.

Almost 20 years have elapsed since the biggest enlargement in the European Union’s history, which significantly increased internal differences; the budget is half this figure and some want to cut it.

They now want to ensure that just like the miracle of the multiplication of the loaves, even by cutting the amounts in the budget, you can have more available funds. There are many questions that arise with these financial instruments. From the public financing of private profit and risk to their failed application in cohesion policy in many countries, which the report itself recognises.

We do not need to waste much time inventing instruments that are, to all appearances, innovative but only help increase differences, inflate financial markets and conceal the real paths that could and should have been followed long ago, such as the essential increase in the Community budget.

  Jaroslav Paška (EFD). – (SK) Mr President, first I would like to express the opinion that the current structure of many diverse European financial instruments and cofinancing programmes is rather unclear for the public and private entities that want to make use of them. I believe that better coordination and streamlining of the structure of financial instruments and the Structural Funds would be desirable so that they might be more effectively used within a single integrated whole.

Financial instruments are designed to support the development activities of different users. There should therefore be a clear and comprehensive information system on their nature and determination so that potential candidates can learn about all the EU financial aid options for their planned activities in one place and in their native language. Finally, if we also want small businesses, entrepreneurs and community to benefit from these instruments, there should be a high-quality consulting and advisory service which would allow them to make an informed decision regarding the most effective combination of financial assistance for their investment plans.

  Petru Constantin Luhan (PPE). – (RO) Mr President, innovative financial instruments are of particular importance in the current period in order to relaunch the economy and achieve the strategic objectives of the European Union.

However, I regret the fact that they have a largely undefined scope which can change rapidly, though in practice it is limited to projects with short-term and medium-term profitability. For that reason, I assert that innovative financial instruments should be used to generate smart and sustainable economic growth.

Public-private partnerships should thus be encouraged, in particular with SMEs, which need to be supported constantly in terms of research and innovation, through varied financial participation instruments. At the same time, to facilitate access to these new instruments for as many investors as possible and encourage their involvement, large-scale information campaigns need to be run across the whole of the European Union.

(End of the catch-the-eye procedure)

  Janusz Lewandowski, Member of the Commission. − Mr President, I would like to make some short comments. From the comments you have made in this room I can hear your support and commitment to a much bigger role of the financial instruments in financing in the European Union in the future. We have no other choice. There are clear needs and there are constraints in the budget. Therefore there is a gap to be filled by these innovative financial instruments, which have already been partially tested but are to be applied in part on a much larger scale and under certain conditions. This is very important.

The conditions have been agreed upon in the so-called revised financial regulation. There are two new parts in the financial regulation. One concerns simplification, in response to the popular request to simplify. The second is a completely new chapter on the innovative financial instruments. This is a set of rules on how to design, adopt and implement, but also how to control and monitor the application of this financial instrument. This is very important for the budgetary authorities, the Council, the Member States and the European Parliament.

Thank you for your excellent job on this very complex issue of new financial instruments. There is no other choice. We have to go ahead.

  Eider Gardiazábal Rubial, Rapporteur. − (ES) Mr President, Commissioner, there is certainly very little left to add, as all those who have spoken have gradually sketched out what the characteristics of these innovative financial instruments should be for the next multiannual financial framework.

There has been talk here of simplicity, transparency and also of information campaigns, so that people can be aware that these instruments exist, for small and medium-sized enterprises, which often imagine the world of EU bureaucracy to be complicated and too far-removed.

Indeed, in the report we also state that there is a need to publicise these financial instruments, that we need to train regional and local organisations, as well as banks and small and medium-sized enterprises, so that they are aware that these financial instruments are available and know how to use them.

I would like to make a small clarification, because sometimes there are questions as to when the financial instruments are used or why subsidies can or cannot be replaced.

There are three investment scenarios: one that is optimal, in other words the project is generating income and is low risk, and it should therefore be financed directly in the market.

There is another situation in which projects have low profitability but clear added value; in this case we are precisely in the territory of subsidies.

However, between these two situations there is a middle ground: when there is significant profit but not enough to access the capital or credit markets, and that is where the financial instruments come into play.

The financial instruments cannot, therefore, under any circumstances, be substitutes for subsidies, nor can they, under any circumstances, create distortions in the market.

Finally we would like to clarify that obviously, as Mr Murphy said, private investment has declined, and we have unfortunately seen how, in recent years, the capital markets have resorted directly to speculation. That is, however, precisely what these financial instruments aim to prevent, because they are going to help profitable projects that we consider to be strategic for obtaining finance, thus avoiding speculation.

  President. − I am going to allow myself to take a liberty, Eider: I want to say at the close of this debate that your uncle, one of the major heroes of the Spanish democratic resistance, who endured years and years of imprisonment and suffering, would certainly have been very proud of the leading role you have played in this debate. Ramón would also have been very happy that I was the one who gave you the floor.

The debate is closed.

The vote will take place tomorrow at 11.30.

Written statements (Rule 149)

  Zuzana Brzobohatá (S&D), in writing. – (CS) The introduction of innovative financial instruments (IFIs) at European Union level should support investment in the European economy in line with EU objectives. Innovative financial instruments should act as a catalyst in situations of market failure or suboptimal investment. IFIs should also mobilise financing from private investors. In the context of the multiannual financial framework, the Commission has extended the application of IFIs under the cohesion policy to those areas that bring growth. I wholeheartedly welcome this focus. As a member of the Committee on Budgetary Control, I believe that the monitoring of IFIs should be developed and that their use should be well coordinated with other instruments to ensure their effective functioning. However, I must emphasise that when financing IFIs private investors should not be afforded priority treatment.

  Vladimír Maňka (S&D), in writing. – (SK) Public investment in the EU has been falling steadily for almost 20 years, but this trend has become more pronounced since the start of the crisis. Both small and medium-sized enterprises and indeed everybody who requires a loan are finding that they are increasingly difficult to obtain. Innovative financial instruments could therefore be an important factor and a tool for the sustainable development of the EU. The Commission should provide a better information campaign on the new financial instruments at EU level so that all investors have equal access to these resources.

In addition, the initiative for the issuing of European bonds for infrastructure with strong added value with the direct participation of EU capital should be rigorously assessed. Furthermore, the Commission should submit proposals to facilitate the release of savings, an underused resource at present, to support medium- and long-term projects which generate sustainable growth in the Union.

  Evelyn Regner (S&D), in writing. – (DE) Tomorrow’s vote in the European Parliament’s plenary session in Strasbourg will put a significant brake on speculative high-frequency trading and foodstuff trading – a further piece of the jigsaw of European financial market regulation following the crisis. We MEPs are the driving force in ensuring that irresponsible speculation and high-frequency trading is regulated. MiFID II will ensure that orders must be at least half a second in length to be valid and may not be cancelled or changed within that time span. I particularly agree with the restrictions that the European Parliament has placed on speculations on the raw materials markets. ESMA, the European Securities and Markets Authority, as the regulator, will be able to decide which market participants may sell which raw materials and in what amounts. This is an important first step in restricting speculation on raw materials, which drives food prices up, and in combating considerable market fluctuations. The proposals for the revised Directive and Regulation on Markets in Financial Instruments (MiFID and MiFIR) provide uniform trading rules for the protection of investors in order to improve the way the stability of the financial markets is protected. Therefore, I will vote for stronger regulation and the inclusion of over-the-counter business.