WRITTEN QUESTION E-3062/02 by Cristiana Muscardini (UEN) to the Commission. Global banking crisis.
Date: 2002-10-25
Institutions: European Parliament, Provisional data
Subjects: bank, economic recession, short-term economic prospects, the EU's international role, world economy

3.7.2003

EN

Official Journal of the European Union

C 155 E/85

(cid:1) The number of officials currently on leave on personal grounds is 566 (on 10 December 2002). It does
not give rise to staff shortages because other persons may be appointed to the posts formerly occupied
by the officials on personal leave. The Commission allows an official’s post to be filled where leave has
been granted for a period of more than six months. Of the 566 officials, on the basis of analysis
relating to 400 of them so far, 10 % are engaged in professional activities and the other 90 % are on
leave for family reasons, educational activities, etc. A full analysis will be completed shortly and the
results will be sent to the Honourable Member.

(cid:1) It is important to emphasise that officials on Personal Leave continue to be subject to the provisions
of Article 12 of the Staff Regulations which require officials to obtain permission before engaging in
any outside activity, and which allow for refusal of permission or imposition of conditions where it is
considered that the activity would otherwise be ‘detrimental to the work of the Communities’. The
Commission would, of course, interpret the creation of conflicts of interests as being ‘detrimental’ to
the Community, and would thus take appropriate action to prevent conflicts arising.

(cid:1) Article 17 meanwhile requires officials (cid:1) whether in work or on leave (cid:1) not

to disclose to
unauthorised persons ‘information not already made public’. If an official who was working in the
private sector did make use of such privileged information, he or she would certainly face disciplinary
proceedings.

(cid:1) The Staff Regulation rules governing leave on personal grounds will be clarified by the reform
amendments proposed by the Commission, which are currently before the Council. In addition, the
Commission is examining ways to provide more detailed guidance to officials and to potential
employers in order to reinforce understanding of the need to ensure that the objectives of allowing
exchange between the Commission and other bodies are fulfilled while protecting the integrity and
security of the Commission.

(2003/C 155 E/097)

WRITTEN QUESTION E-3062/02

by Cristiana Muscardini (UEN) to the Commission

(25 October 2002)

Subject: Global banking crisis

In the second week of October the leading stock market indices plummeted to their lowest levels for six
years. The fall in the financial markets, the increase in company bankruptcies and insolvencies in the
foreign debt of many countries have had a devastating effect on bank balance sheets. The total loss in the
German banking sector over the past two and a half years has reached alarming levels. Commerzbank
shares have collapsed from EUR 44 in 2000 to EUR 5,3 on 8 October. The bank’s capitalisation has fallen
from EUR 24 billion to 3 billion. Other shares in the DAX-30 have suffered huge losses: Bayerische Hypo
Vereinsbank −84 %, Deutsche Bank −64 %, Allianz/Dresdner Bank −83 %, Münchener Rück −75 %, MLP
−96 %. The combined market capitalisation of these six banks fell from EUR 300 to EUR 71 billion
between 2000 and the start of October 2002. The ECB’s chief economist has admitted that on the stock
market front the banking situation is critical. Company bankruptcies have reached new records in the
USA, Japan and Germany. Defaults on company debentures reached USD 140 billion in the first nine
months of this year. 28 countries are unable to meet their debt servicing obligations. In the USA and
Europe investment banks will write off more than USD 130 billion. The largest American bank, which
boasts a balance sheet of USD 713 billion has been downgraded by the rating agencies. The market
capitalisation of Morgan Chase has fallen from USD 105 billion to USD 33 billion (down 69 %). Charles
Schwab has lost 82 %, Morgan Stanley 72 %, Merrill Lynch 60 %, Goldman Sachs 54 %, Citigroup 50 %,
Lehman Brothers 48 % and Bearn Stern 45 %. Even greater risks are emerging in terms of insolvencies. The
huge US real estate bubble involves USD 5 trillion in risk bonds. The derivatives bubble, with operations
amounting to USD 26 trillion at Morgan Chase and USD 11 trillion at Deutsche Bank, could be another
bomb waiting to go off.

C 155 E/86

Official Journal of the European Union

EN

3.7.2003

1.

Can the Commission confirm these data?

2.
If so, does it not consider that it should suggest convening an international conference to remedy the
devastating effects of the speculative bubble and to establish rules to prevent a huge gulf emerging between
the financial economy and the real economy?

3. What initiatives does the Commission intend to take with regard to this vast loss in wealth and to
safeguard the interests of investors?

Answer given by Mr Solbes Mira on behalf of the Commission

(28 November 2002)

The Commission cannot directly confirm the data cited in the Honourable Member’s written question, but
it certainly shares her concerns on the developments in the banking sector. However, it should also be
considered that the banking sector entered the current period of cyclical weakness with relatively strong
balance sheets and profitability.

The Commission does not consider convening an international conference to remedy the effects of the
speculative bubble, nor does it plan initiatives directly aiming at stabilising the wealth of investors. Such
initiatives are not within the institutional competence of the Commission and would in any case have a
the rapid and complete
limited impact. Conversely,
implementation of all the measures in the financial services action plan, the initiatives in the area of
corporate governance, as well as the rationalisation of the framework for Community-level regulation and
supervision, would go a long way in raising the level of investor protection, strengthening the stability of
the financial system, and increasing its efficiency, to the benefit of investor and companies alike.

the Commission would like to stress

that

(2003/C 155 E/098)

WRITTEN QUESTION E-3068/02

by Roberta Angelilli (UEN) to the Commission

(25 October 2002)

Subject: Price patterns in Italy following the introduction of the euro

In September 2002, the Italian Institute for Statistics published its data on consumer price patterns, which
showed that the underlying rate of inflation for that month was 2,7 %. The most significant increases were
in the fruit and vegetable and clothing sectors. The rise in the cost of living has led to a marked decrease
in consumption and has also impacted on the economy as a whole. Italy’s major consumer protection
organisations have responded to this problem by opening discussions with the government and with
traders’ representatives aimed at seeking a solution to these high prices.

Could the Commission therefore:

1.

2.

indicate whether it will move to harmonise European legislation in the field of consumer protection,
pursuant to Article 153 of the EC Treaty;

state whether any studies have been performed or documents produced on inflation in the European
Union following the introduction of the euro;

3.

give its general opinion on this situation.