Welcome
I would like to extend a very warm welcome to His Eminence the Metropolitan Galaktion of Stara Zagora in Bulgaria, who is seated with a delegation of Orthodox clergy in the distinguished visitors' gallery.
(Applause)
Your Eminence, it was a pleasure to be able to speak to you this morning.
It is also a great pleasure for me to welcome the winners of the first Charlemagne Youth Prize to the European Parliament today. This prize is awarded jointly by the Foundation of the International Charlemagne Prize of Aachen and the European Parliament. The award ceremony took place on 29 April in Aachen. Our young friends have been visiting the European Parliament since yesterday and are in the distinguished visitors' gallery right now.
(Applause)
I welcome the winner of the first prize, representing the project 'Students Without Boundaries', Emöke Korzenszky from Hungary, Ilona Mikoczy from Slovakia, Agota Demeter from Romania and Zoltan Csadi from Slovakia. Lorenzo Marsili from the United Kingdom is representing the 'Festival of Europe' project in London, which won second prize. Last but not least, I welcome the winner of the third prize, which was awarded to the state grammar school in Vyronas, a suburb of Athens in Greece. Paraskevi Christodoulopoulou, you are most welcome.
On behalf of the European Parliament, I would like to thank you for your contributions to promoting the idea of European integration amongst young people.
(Applause)
I would also like to welcome a delegation from the Parliament of Navarre, Spain, who are seated in the distinguished visitors' gallery. The delegation is headed by the Parliament's President, Elena Torres Miranda. A warm welcome to you!
(Applause)
Today and tomorrow, the 10 members of the delegation will be meeting various representatives of the European Parliament and I too will have the pleasure of meeting them. I wish you a successful, positive stay in Brussels and visit to the European Parliament. Bienvenidos!


Forwarding of texts adopted during the sitting: see Minutes


International accounting standards (debate)
The next item is the motion for a resolution on international accounting standards.
Chairman of the Committee on Economic and Monetary Affairs. - (FR) Mr President, Commissioner, there is a certain logic in the sequence of discussions we are having because, in this debate, we have to decide whether or not to adopt the so-called IFRS 8 standard at European level.
In a previous debate on 25 April 2007, when Parliament had to decide on this standard, we were unequivocal in stating that we felt the conditions were not in place for us to be able to do this. There were two reasons for this.
The first was that we had just given the European Commission and the Council a very clear message that we felt that the convergence process the European Union was entering into with countries outside the EU for the recognition of their accounting standards could not simply amount to a cut-and-paste of their standards with the international standard. We also felt that the convergence process should be a mutual process.
When it came to the IFRS 8 standard, we had the impression that this was not the route that was being followed by the international organisation and we wanted to alert the public to this.
The second reason for doing so was that many people were warning us, quite rightly I believe, of the fact that this accounting standard was being proposed for all users, namely auditors, investors and supervisors, without an impact assessment having been carried out first.
Now, we know the obsession of the Commission chaired by Mr Barroso with having these impact assessments carried out regularly as part of better regulation, which it uses as a roadmap. It seems to us that what applies at European Union level should also apply to the self-regulating international standardisation bodies We have therefore asked the Commission to conduct this impact assessment itself, in the absence of any assessment by the international body.
The Commission met its formal commitment by presenting the conclusions of this impact assessment to the Committee on Economic and Monetary Affairs in early September, as agreed. Nevertheless, in future, we need to acknowledge that the scope of this assessment and the way all the parties were interviewed undoubtedly needs to be reviewed to improve the spectrum of those interviewed, so that it is not only those known as the preparers, that is those who draw up the accounts.
Through its desire to move forward with this debate and perhaps also to contribute to the international standards becoming the reference throughout the world, Parliament still wants to adopt the IFRS 8 standard today and this demonstrates both its sense of earnestness in the procedure for adopting the accounting standards and also its sense of responsibility.
As important discussions begin with the United States to establish the conditions for its own adoption of the accounting standards, it seems important to us to show our determination to do so ourselves in a lucid and responsible manner.
I hope this Parliament will adopt the IFRS 8 standard tomorrow, while stressing that when it is revised - and this is already in progress at the IASB, the International Accounting Standards Board - account is taken of the need for precise financial information about the reality of group activities. Many NGOs in particular are sensitive to the fact that through this information, a clearer picture of the activity of groups - for example, mining in a particular geographical area or country by country where this is significant - can be given to those affected by these activities.
Finally, as my last point, I would like to say again to the Commission that we feel the result of this procedure is a very important call to respect the European vote, as a matter of equivalence, and that, when impact assessments are carried out, these enable all parties to express their points of view.
I would like to point out to you that the vote will not take place tomorrow, but on Wednesday.
Member of the Commission. - Mr President, I would like to warmly thank the Committee on Economic and Monetary Affairs for the excellent work they have carried out regarding the adoption of International Financial Reporting Standard (IFRS) 8 - Operating Segments, the new standard on segment information.
After the International Accounting Standards Board (IASB) issued the standard in November 2006, a debate ensued concerning the suitability of IFRS in the European context. This debate was useful. We had to make sure that the European Union would not adopt a new accounting standard just for the sake of convergence with the equivalent US standard, but mainly because it improves the quality of financial information and is conducive to the European public good.
Before reaching a final decision, the Commission and Parliament agreed in May 2007 that the Commission's services would carry out an analysis of the potential consequences of adopting IFRS 8. They ran a public consultation during July and August and gathered the views of stakeholders on the cost/benefit implications and the overall impact of adopting IFRS 8. On the basis of almost 200 contributions, my services have prepared a report which was provided to Parliament on 10 September 2007. The report's main conclusion is that the benefits of adoption of IFRS 8 would outweigh its costs. Further, many constituents stressed that a swift endorsement of IFRS 8 would remove uncertainty about the treatment of financial statements for the period ending in December 2007.
Let me stress that we did not ignore the concerns that had been raised regarding the introduction of the so-called 'management approach', which gives management more leeway compared with the existing standard on segment reporting. Some constituents were concerned that IFRS 8 lacks strict requirements on detailed geographical information because it allegedly does not require sufficient detail on a country-by-country basis. Discussions with constituents revealed, however, that IFRS 8 is rather expected to improve this kind of disclosure. Further, it seems that particular concerns in this area, in our view - and in the view of the majority of respondents to our consultation - cannot be resolved through a financial reporting standard on segment information. This could be better done through a further development of a framework regarding corporate social responsibility aspects.
We agreed that IFRS 8 should not be adopted solely for the sake of convergence, yet we believe that it is crucial to see the issue also in the broader context of the European Union adopting a set of standards which are truly global. A couple of years ago we all agreed that Europe should not opt for its own set of standards but rather support and promote the development of a high quality and global set of standards like IFRS.
We are working on improving the governance of the IASB. On 7 November the European Commission, the US Securities and Exchange Commission and the Japanese Financial Services Agency made a joint statement announcing their agreement to seek certain changes to strengthen the institutional framework of the International Accounting Standards Committee (IASC) Foundation. These changes are intended to strengthen the accountability of the Foundation's trustees, in particular by replacing the current self-appointment process for the appointment of the trustees with a process in which public authorities are responsible for the final approval of trustees.
The joint statement also recognised the importance of further strengthening the IASB's due process, including by carrying out impact assessments. This agreement provides a strong basis to address the concerns expressed by this Parliament. It also reflects the issues identified by the Commission's two monitoring reports to ECOFIN concerning the IASB's governance. We will work with the IASC Foundation and the international partners to develop more detailed proposals in the coming months. We will, of course, maintain a close dialogue with the European Parliament throughout this process. I am confident that the outcome of this process will ensure that standards respond to European needs and are easily acceptable and applicable by all stakeholders in the EU and also globally.
Let me conclude. The swift adoption of IFRS 8 is important for two reasons. It improves the quality of financial information and it provides certainty to all market participants. The discussions of the last months have demonstrated that a stronger involvement of the European Parliament in the endorsement process is necessary. The Commission will also continue to work with the IASB and the IASC Foundation and with our international partners to ensure that the process of developing international accounting standards is fully accountable, transparent and meets the needs of European stakeholders.
on behalf of the PPE-DE Group. - Mr President, Commissioner, the IFRS 8 process is symptomatic of where we stand today with regard to implementation, endorsement, of IFRS in Europe. I should like to say very clearly from the outset, to those who perhaps always assume the opposite of Parliament, that the majority of the European Parliament is in favour of IFRS, of a global standard, and of taking the same course on this, the right course.
We ought to examine this IFRS process, in particular, in relation to whether all is well with it at the moment: the Commission presents the European Parliament with a standard at short notice, the Commission and industry are expected to implement it relatively quickly, pressure from industry gets stronger and stronger, and those who have the duty of justifying it to citizens on the ground are not given any opportunity to form an opinion on it.
The Commission has prescribed an appropriate phase, but we are going to have to do some straight talking about what has happened now, as the implementation phase is now being postponed retrospectively. To avoid this happening in future it is vital that the legislative institutions, such as the European Parliament, are informed about the work in good time. I welcome the announcement last week by the Commission, with the SSI, the Japanese and IOSCO. What the IFRS organisation then presented - regarding providing its own governance - is a correct, but long-overdue step towards appropriate legitimisation and governance. We, the European Parliament, shall pay particular attention to whether democratic rules of play are observed.
That does not mean that the European Parliament must be directly involved, but only if the process is working correctly shall we be able to ensure that it operates optimally in future when each individual standard is implemented - and in future we shall be consulted about each individual standard.
on behalf of the ALDE Group. - Mr President, adoption of the IFRS 8 standard will enable our companies to use the standard for the current financial year and put an end to uncertainty.
The management approach will enable our companies to report publicly, with the same structure used internally, thereby reducing the burden of reporting. Users will have access to information that was previously kept internally. So IFRS 8 is a win for both the companies and the investors.
But I have some concerns about the impact assessment that follow a pattern about which I have spoken before. Respondents this time seemed predominantly producers rather than users, and with regard to users there were no questions on comparability. A more pro-active approach may need to be taken with respect to impact assessments generally, and it certainly cannot have helped in this instance if one hoped-for sector of respondents does not have key questions posed.
Further, some of the justifications in the report do very little to justify. Indeed, to me they look more like the type of document that is written ahead of meetings in the hope of reaching agreement.
I am very British about this and prefer my minutes and responses and reports to look like they were drafted after events.
I regret that European companies have been kept waiting for our endorsement of the standard, but Parliament should not be expected to give its assent, on a say-so, without time and proper information to make an assessment.
However, I am pleased that there has been an improvement in cooperation recently, and I look forward to that continuing.
Mr President, the importance of appropriate accounting standards cannot be exaggerated. In today's world there is a growing need for clear, comparable and sufficient information for investors as well as facilitating business by reducing compliance costs.
Therefore, I agree with my colleagues on the importance of prudence in the question. Decisions should not be taken lightly, and I really think that the views of all colleagues who have mentioned timely impact assessment as an important tool to find balanced solutions and make sure that all stakeholders and their opinions are considered are very important.
Parliament should, of course, be kept duly informed. Of equal importance is to ensure that the EASB governance system is reviewed and adjusted so that regulatory authorities can support its standard-setting process and its result. It is, after all, the only body we have to do a cross-border account standards setting process.
However, while the process has not been perfect, we must not let this delay our work to close the gap between us and our economic partners. Today's world is much more interconnected, and it is in our interest to make it function as smoothly as possible, and compatible standards are vital to this end.
Within the Transatlantic Economic Council, both sides are eager to make this work, and IFRS standards and financial reports are an important tool to find this mutual recognition of standards.
For now, the IASB is the best way we have. European stakeholders must be involved and the functioning of the IFRS should be monitored. It can and should also be changed to correct possible mistakes, if we make mistakes. Democracy, of course, takes time but sometimes it is needed to correct mistakes. Many of my colleagues have mentioned that it was very important that Parliament was able to raise some concerns and make improvements to the process.
The debate is closed.
The vote will take place on Wednesday, at 12 noon.


Agenda of the next sitting: see Minutes


Decision on urgent procedure: see Minutes


Documents received: see Minutes


Agenda for next sitting: see Minutes


1. Negotiations on the EU-Moldova Association Agreement (