Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-09-01-Speech-1-079"

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". Mr President, Commissioner, it is expected that the Basel Committee will, this autumn, come to a decision on the equity capital of banks in the future. It is certain that we will follow with a very critical eye the USA’s plans for transposing this into law in the future, and that we will, of course, come to our own conclusions at European level. If, though, the decision is taken in the autumn, it is envisaged that we will begin the lawmaking process next year. This report concentrates on small and medium-sized enterprises, as Basel II has the objective of making the international financial markets more stable, an objective shared by all. The fallout from Basel II must not, however hit those who had no part in destabilizing the financial markets – in particular the small and medium-sized enterprises in the European Union, who, as is constantly reiterated, form the backbone of our economy and are the only means whereby we may be brought out of economic crisis. There have been calls for some considerable time for a study, and this makes it all the more important that it should be produced by the time a proposal for a directive is put forward, so that then the relevant conclusions may be drawn as regards the legislation. I would now like to explain a number of the main points in my report that I see as very important. The first is the issue of the legislation. I take a very critical view of the way we are acquiring more and more ‘soft law’, by which I mean legislation in international bodies that enjoy no democratic legitimacy. This is no criticism of the work they do, but of the way in which they do it. If Basel II were the only one, one might be able to overlook this, but we are ending up with more and more bodies like Basel II, for example the one on international accounting standards, in which experts get together and formulate standards that are then put before Parliament and the Commission in the expectation that we will transpose them into law without much in the way of correction. The only way we, as responsible politicians, can respond to this process is in the negative. We have to turn our minds to a more transparent process, one that influences the way these bodies are composed. Although I do not believe it to be necessary that we should, in the plenary or in committee, discuss every point of detail, we must, being responsible politicians, acquire greater influence. In any case, the European elections are coming up next year, and, back home, they will be asking all of us why we took this decision. This leads me to my second comitological point. It is quite clear to me too that Basel II is not a typical Lamfalussy process, as the lawmaking process will find us sharing in decisions on the annexes. The Lamfalussy process will, however, be used, as we will at that stage be determining which annexes will be amended by which procedure. The same applies here too; this is not to make a general criticism of the Lamfalussy process, but there are two points that must first be clarified. One – the strengthening of the law, the right of recall – is a matter for the Convention on the Constitution, and the second is, of course, a critical observation. Does Lamfalussy work in the way its creators thought it would, or is there still room for improvement? So much, for a start, for the fundamental principles! So far, much has been achieved; there is the million-euro ceiling, which we demand should be adjusted in line with inflation; we have got internal and external rating – where we will certainly have to see to it that smaller banks do not have to face the hurdles of excessive bureaucracy; the 0.2% granularity criterion must disappear, and we have to consider procyclicality. We are calling for a study to re-examine this point, and in greater detail, before the legislation enters into force. How, in future, will start-up-companies in this area be treated? At European level, we will certainly have urgent need of partial use which Basel II has hitherto rejected. It is these things that we demand of Basel, and if the Basel Committee does what we want it to do, we will be able to adopt the rules without making major changes to them. If, though, it does not do so, we will introduce the necessary flexibility at European level. Basel does, though, present opportunities, such as rating for small and medium-sized enterprises to give them a clear idea of the state of their operations, although here it will be necessary for the banks to allow themselves enough time to explain rating, to work with small and medium-sized enterprises and to support their further development. We will, of course, also have to do our homework at national level. In my own country, people are always talking about small and medium-sized enterprises having a tradition of weak equity capital. Please bear in mind that the weak equity capital of small and medium-sized enterprises is not one of the traditions that I, as a Bavarian, see as a good thing; on the contrary, it results from a misguided fiscal policy over the last few decades. It is now time for the appropriate corrections to be made back home. Basel II is to be transposed in 2006 or 2007. This is a realistic goal if we work at it, but we do not hold to it dogmatically; in other words, we reserve to ourselves the right to carry out the scrutiny on which a decision will depend."@en1

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