International

The European Parliament has approved the draft European Union Regulation designed to deal with speculation in exchange losses, albeit to an inadequate extent. Many aspects of the problem of speculation are, however, not subject to any regulation. Commenting on the measure, SP Euro-MP Dennis De Jong said: 'I’m enthusiastic about the ban on speculating in exchange losses on shares and bonds which you don’t actually own, so-called naked short selling. The way in which this will work in practice is, however, left to the European supervisory authority and in these sorts of cases every detail counts. When the proposals are presented at the end of this year I’ll be taking a close look at them.’

In the SP’s view the Regulation also leaves many other matters unregulated in relation to other points. It has nothing to say, for example, about speculation in raw materials and farm products despite the fact that these are major targets for traders. “We’ve seen in recent years that the prices of raw materials and foodstuffs have been going up and down like yoyos and that it’s the speculators who are behind this,” De Jong asserts. “This has exceptionally grave consequences for developing countries. So the fact that the Regulation has nothing to say about this is a missed opportunity.”

De Jong also has doubts about the thresholds above which speculators are required to provide information about short selling. “In regard to treasury bonds, certainly, this has been left entirely in the hands of the European Commission,” he says. “In relation to such an important matter this is undemocratic. It should be the national parliaments and the European Parliaments who are able to take these decisions.”