Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-07-08-Speech-2-388"
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"en.20080708.36.2-388"2
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"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."@en1
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