WRITTEN QUESTION E-0754/04 by José García-Margallo y Marfil (PPE-DE) to the Commission. Establishment of a European legal framework for hedge funds.
Date: 2004-03-11
Institutions: European Parliament, Provisional data
Subjects: financial legislation, investment company, speculative capital

C 84 E/870

Official Journal of the European Union

EN

3.4.2004

As part of the implementation of its budgetary commitments, does the Commission have any specific
plans for campaigns to promote the euro in the new accession countries in order to encourage use of the
euro in transactions between these countries and the eurozone countries, given that this would reduce the
cost of such transactions, in particular with the networks of chambers of commerce and industry?

Answer given by Mr Solbes Mira on behalf of the Commission

(6 April 2004)

The international use of the euro has gradually increased since its introduction.
In 2003, the euro
represented 31 % of international bond issues, 23 % of foreign exchange settlements and 19 % of official
foreign exchange reserves. The euro also plays a significant role in trade in non-euro area countries that
have strong ties with the euro area. Finally, it serves as an anchor currency in exchange rate regimes of a
number of countries, mainly in Europe, northern Africa and the French African Community (CFA) Franc
Zone.

The fact that the bulk of international commodity trade is denominated in US Dollars (USD) does not
automatically imply that denomination of these imports in euro would reduce their price or price
variability. For crude oil, for example, in the past three decades, exchange rate movements have sometimes
played to the advantage of European importers and sometimes to their disadvantage.

The best contribution policy can make (cid:1) and is indeed making (cid:1) in order for markets to increasingly
adopt the euro at the international scale is to improve the euro’s usefulness in the three functions of means
of payment, unit of account and store of value. The European Central Bank’s (ECB) stability-oriented
monetary framework and efforts to improve financial market (infra-) structure and to harmonize financial
market regulations thus strengthen the euro’s international perspectives. Furthermore, progress on the
external representation front would also no doubt increase the international status of the euro. Finally, the
provision of information to key actors plays an important role.

As regards the 10 acceding Member States, their adhesion to the EU implies their future adoption of the
euro when they meet the convergence criteria. For these countries, the euro is already the dominant
invoicing currency in their trade. Its use in exports of the ten Acceding Countries for which data is
available ranges from 22 % (Cyprus) to 87 % (Slovenia).

Since 2003,
the Commission has organised information and communication activities, such as the
conference that took place in Warsaw on the subject ‘From accession to adopting the euro’, in which the
Parliament participated. Among the structural activities achieved in 2003, there is the preparation of a
‘Framework for a Communication Strategy for the euro and Economic and Monetary Union in 2004 and
beyond’ to be implemented in 2004. New Member States are privileged beneficiaries of the activities
planned in this strategy. The Commission plans to introduce partnership agreements with these States,
which will allow them to progressively integrate experiences with a view to the use of the euro. In addition,
information seminars will be organised with Information and Communication Officers from Central Banks
and Ministries of Finance of these States. Other groups, including the media, as well as organisations such
as chambers of commerce and industry of those countries, are the targeted groups of the Commission’s
plans to promote and encourage the use of the euro in the new Member States.

(2004/C 84 E/0963)

WRITTEN QUESTION E-0754/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

(11 March 2004)

Subject: Establishment of a European legal framework for hedge funds

How does the Commission plan to follow up the report by Mr Purvis (A5-0476/2003) on hedge funds,
and in particular the possibility of establishing a European legal framework to regulate them?

3.4.2004

EN

Official Journal of the European Union

C 84 E/871

Answer given by Mr Bolkestein on behalf of the Commission

(16 April 2004)

Regarding Parliament’s vote on the report by Mr Purvis on hedge funds, Mr Margallo would like to know
what follow-up action the Commission is planning, particularly on the possibility of establishing a
European legal framework to regulate such funds.

The Commission would first remind the Honourable Member that, at their informal meeting in Oviedo in
April 2002, the Economics and Finance Ministers undertook to examine the role played by hedge funds.
This undertaking formed part of a raft of measures taken in the wake of the Enron scandal.

At the same time, several initiatives were launched at international level in this connection, including by
the Financial Stability Forum (FSF), the International Organisation of Securities Commissions (IOSCO) and
national regulators such as the US Securities and Exchange Commission.

The report by Mr Purvis represents a major contribution in this respect. It should also be borne in mind
that the Commission’s Internal Market Directorate-General set up in October 2003 four professional expert
working groups to examine, among other things, the strategic priorities for the work to be undertaken by
the Commission in the years ahead. One of
the groups has been charged with examining asset
management while another will
look into securities issues. The Commission will, of course, take into
account the groups’ conclusions, which will be published by the end of April and then opened for public
consultation between May and July. A high-level conference will be held on 22/23 June. It is only after the
results of the public consultation and the conclusions of the high-level conference have been analysed that
the Commission will take an official position on the subject of derivatives and alternative investment funds.

(2004/C 84 E/0964)

WRITTEN QUESTION E-0755/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

(11 March 2004)

Subject: Statistics relating to the harmonised consumer price index in Europe

The harmonised consumer price index used by Eurostat is a benchmark for comparing inflation between
Member States but, without casting doubt on its highly sophisticated scientific nature, how does the
Commission explain the persistent feeling among the public in the euro zone that price rises far exceed the
increase recorded by the harmonised consumer price index?

Does the Commission realise that, if it cannot be changed, this public perception will have particularly
negative effects as it
inflationary factors have very important psycho-
sociological interactions and that the fall or stagnation in household consumption can partly be explained
by this perception, which may well be mistaken, but which demands a convincing response?

is common knowledge that

Answer given by Mr Solbes Mira on behalf of the Commission

(15 April 2004)

The Commission has noted the discrepancy between price increases recorded by official statistics such as
the Harmonised Index of Consumer Prices (HICP) and measures of perceived inflation in several Member
States. There are various possible explanations for such discrepancy. One that has received supportive
evidence (see for example Eurostat’s June 2003 HICP press release) is related to the fact that, following the
euro cash changeover, consumers experienced significant price increases for some types of goods and