Mr President, the Parmalat financial scandal is a direct result of the monetarisation of the economy. This monetarisation is clearly excessive because the production and trade that meet the people’s material needs are drowned in the speculative waters of international high finance. Meanwhile the informal economy flourishes, along with the criminalisation of the economy, in which shady dealing becomes increasingly prominent, to the detriment of social and economic development. This scandal is a further example of the pernicious effects of market deregulation and the unbridled movement of capital. Parmalat made use of every trick in the book: front organisations in tax havens, the benefits of special offshore regulations, hedge funds and forged documents and bills. This is how financial holes were concealed and tracks were covered, using complex structures and involving many subsidiaries, in order to carry out operations in the area of bonds and financial derivatives, with the assistance of international banks, cover-ups on the part of international auditing firms and rating agencies giving positive assessments. Thousands of jobs were put at risk, in the thirty-plus countries in which Parmalat operated, creating enormous difficulties for the thousands of milk producers who depended on the company. This is no isolated case, however. In the past few years alone, a number of financial scandals have taken place – Enron, WorldCom and Merck, in the United States; Crédit Lyonnais, Vivendi, Ahold, Kirch, Marconi and Equitable Life in EU Member States – which have had a devastating social and economic impact. Since this is a question of economic models, what is needed is greater stringency and tighter controls on financial derivatives, replacing mechanisms that are a product of, and whose raison d’être is, speculation. International efforts need to be stepped up to put an end to tax havens and to limit offshore operations. Financial instruments are needed to monitor the movement of capital, such as introducing effective taxation of stock market profits. What is most urgently required, however, is a return to the core values of production and labour. However considerable the problems of shareholders are – and they undoubtedly are serious – priority must be given to protecting jobs and to safeguarding workers’ rights and to ensuring their right to information, consultation and participation. In the case of Parmalat, compensation should be immediately considered for those milk producers affected. I should like to highlight the negative contribution of the EU in terms of monetarisation, and, specifically, the Financial Services Action Plan, which encourages the deregulation, liberalisation and integration of capital markets together with the dismantling of prudential rules and control mechanisms. It worries me, Commissioner, that you say that hasty and poorly thought through legislation may exacerbate, rather than solve, problems of regulation illustrated by large-scale cases, such as Enron and Parmalat. In spite of your ideological concerns and your reluctance to take risks, we cannot ignore the evidence staring us in the face, or the urgent need to address these problems effectively.

Political group: GUE-NGL