Mr President, it has often been said that the advent of the euro would serve as the catalyst for sweeping reforms in Europe. This is especially true with regard to the financial markets, which are still largely fragmented. The view of the Commission is that the creation of a vast financial market should reduce the cost of finance for all economic operators. Nevertheless, since the financial markets remain vulnerable, there is a need to create, parallel to the establishment of this large market, regulatory authorities vested with wide powers, not to intervene on a routine basis but to take action when the rules of common sense have been breached by players in the field. These principles are applied in the draft directive on market abuse. Let me make it quite clear that the proposal from the Commission is a sound document. It resolutely addresses the key problems. Europe is not currently able to penalise insider dealing and market manipulation effectively. Such operations have long been considered with a certain degree of forbearance. But the fact is that anyone who indulges in insider dealing or market manipulation is guilty of an offence. He or she is stealing from the other market operators. When insiders make a killing in the space of a few minutes, small shareholders and honest brokers are the ones who bear the brunt. The Commission proposal has been a welcome development in the light of the attacks of 11 September. Confronted by groups of terrorists who can use the anonymity of stock-exchange transactions to obtain funding for the vilest purposes, Europe is duty-bound to respond on the financial front too. Allow me now, Mr President, to comment briefly on the main objectives of this directive. Our purpose in clarifying its provisions is to avoid writing a blank cheque for secondary legislation. We cannot confine ourselves to vague definitions, particularly as regards the definition of market manipulation. For this reason we have developed this and other definitions, although we have left some scope for them to be supplemented in response to imaginative innovations within the markets. We believe we have struck a fair balance between precision and flexibility. The financial products covered by the directive have been specified in the body of the text, but there is still scope for the inclusion of subsequent financial innovations. Market operators have expressed what are ultimately legitimate concerns about the pursuit of acceptable practices in the financial markets. In this respect, Parliament puts its trust in what we call the Lamfalussy procedures as a means of obtaining universally acceptable secondary legislation. Taking a constructive approach, we wished to go further along the avenues explored by the Commission. Preventive measures must be paramount. The risk of fraudulent use of confidential information increases if information is not properly disseminated. This is why greater transparency is essential. In the first place, issuers will have to post on their websites all inside information that they are required to disclose. Secondly, persons discharging managerial responsibilities with an issuer of financial instruments must disclose their transactions. This disclosure must be made without delay so that the market can digest the relevant information. In accordance with this pragmatic approach, we have amended some of the provisions proposed by the Commission. For example, the imposition of an obligation on financial intermediaries to reject suspect orders seemed to be rather unrealistic. How can an intermediary take such a decision in a matter of seconds when the regulators’ enquiries into the activities of suspected offenders may take months? By the same token, the principle of a single authority must not rule out a certain measure of flexibility. Similarly, the single authority should be able to delegate some of its powers to other authorities or to stock exchanges. The single authority would, however, retain ultimate responsibility. We also turned our attention to the conditions for the implementation of the directive. The current procedures are glaringly inefficient. Only thirteen criminal penalties were imposed for market manipulation in the 17 countries of the European Economic Area between 1995 and 2000. The subsidiarity principle prevents us from harmonising criminal and administrative penalties throughout Europe. Our preference is for administrative penalties. We are asking for an indicative list of administrative measures and sanctions to be compiled by the Commission. I also wished to draw attention to the financial resources to be put at the regulator’s disposal. In Europe, regulators’ budgets are often derisory. In the United States, a debate has been taking place in the wake of the Enron affair on the need to increase the resources allocated to the Securities and Exchange Commission. But are we aware that the SEC budget is already almost fifty times higher than that of the German regulator? Lastly, I wanted to strengthen cross-border cooperation by providing for an arbitration body. Any regulator who has a request for information rejected should be able to ask his or her peers to arbitrate. While regulators must be vested with real powers, this does not mean that they should exercise these powers indiscriminately. The regulator should benefit from the expertise of market participants; to this end, we propose the creation of a consultative committee within each national regulatory authority. In conclusion, may I remind the House that modernising financial markets implies not only greater efficiency but also a more level playing field. The financial markets on both sides of the Atlantic undoubtedly suffer from the same ills: constant conflicts of interest, calculation methods that defy scrutiny and weaknesses in the monitoring of off-balance-sheet operations and of derivative transactions. The modernisation of financial systems requires the involvement of all players. An active Parliament must engage in dialogue with all interested parties and listen to all the lobbies. But the latter do not always seek to serve the general interest. I have the feeling, Mr President, that the proposed text serves the general interest, whilst respecting the legitimate interests of the financial world. I should like to reply to certain activists by quoting the words of Sir Howard Davies, head of the Financial Services Authority. ‘Some well-paid lawyers’, he said, ‘are talking high-priced, high-octane nonsense’. This remark is equally applicable to certain lawyers in the Commission who seek to make themselves indispensable by creating a steady flow of new difficulties. Mr President, may I appeal to Commissioner Bolkestein to preserve the fragile political consensus between our institutions in this domain.

Political group: PSE