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Financial Speculators must not be allowed to gain from hunger


20 October 2011

European Commission proposals announced today will need strengthening to stop financial traders from creating artificial highs in food prices that are putting the world's poorest people at risk of starvation.
 
That's the message from the Labour Euro MP who will guide plans to update the EU Market Abuse Directive through the European Parliament.
 
Commenting on today's announcement, David Martin MEP, Labour’s spokesperson on International Trade, said: “The publication of these proposals gives us an opportunity to tackle harmful food and fuel speculation and to increase levels of transparency and openness in financial markets."

The European Commission has adopted legislative proposals for revisions to the Market in Financial Instruments Directive (MiFID) and for a Market Abuse Regulation and Directive.
 
This legislation governs financial trading in the EU and the revisions will address, amongst other issues, financial trading in real world commodities such as food and fuel. The Commission proposal will bring abusive practices in commodities markets under EU rules for the first time. Mr Martin, who is Scotland’s most senior MEP, added: “Speculation on commodity markets causes food price spikes, putting the poorest people in the developing world at risk. These price spikes also put pressure on household budgets here at home, from the fuel in your petrol tank to the food in your shopping basket.

“We have called on the European Commission to include specific provisions to prevent systemic risks and manipulative practices in the market in financial instruments directive (MiFID) and the market abuse regulation."
 
The proposals will now be debated and amended by the European Parliament and the governments of the 27 EU Member States.  Mr Martin said that: “Thanks to the Lisbon Treaty we have much more power in this area.  I therefore look forward to reviewing these proposals to ensure that they meet the Parliament’s call to tackle abusive speculation."