Initial steps towards restricting food speculation | Friends of the Earth Europe

Initial steps towards restricting food speculation | Friends of the Earth Europe

New finance directive lays out improvements, but loopholes remain

Food
speculation by banks and financial institutions has contributed to
rapid and unpredictable swings in food prices over recent years, with
devastating impacts on poor people in developing countries. The European
Union will introduce new regulations which take small steps towards
curbing the financial speculation on food crops, according to Friends of
the Earth Europe, after a deal was struck last night between the
European Parliament and Greek EU Presidency.

The agreement on the
review of the Markets in Financial Instruments Directive (MiFID) - which
sets new regulations for financial markets – will curb the amount of
shares a trader can hold. National governments will set position limits,
or limits on the amount of shares a speculator can hold on the market,
with oversight and direction by a European body, the European Securities
and Management Authority (ESMA).

Anne van Schaik, accountable finance campaigner at Friends of the Earth Europe said: "Food
speculation costs the world's vulnerable the food on their plates. A
new EU law that cuts this unethical trade is welcome. However with
national governments having the possibility to set position limits, it
remains to be seen whether they will really rein in this destructive
practice, or fall victim to corporate greed."

Initial steps towards restricting food speculation