Lamfalussy accuses the Commission of failing to consult on market laws

Date: 18/10/01

The architect of sweeping reforms in EU securities markets has attacked the European Commission for steamrolling through the new laws.

Baron Alexandre Lamfalussy said the EU executive had launched directives on sales prospectuses and market abuse without properly consulting those most affected.

In an interview with London-based management journal the European Business Forum, he said: "I am concerned about the European Commission's failure to consult adequately before it went ahead with the issuing of these directives. "Its justification is that there was a consultation exercise a year ago and that re-opening the procedure would mean further delays ... but it is clear from what market participants say that the discussions a year ago were not based on a true dialogue and that the substance of the proposals has not been improved."

He said this was a "worrying sign" which showed the EU executive had not learned from its "old habit of simply showing market users their drafts" when it launched the first two directives in a raft of new legislation. "The whole thrust of the wise men's report [written by Lamfalussy and a team of experts] is that the process must start with consultation."

The former Belgian central banker also attacks Germany for the way it has gone all out to protect its national interests during discussions on securities reform. It persuaded the Commission to ditch qualified majority voting in the new 'European Securities Committee' which has been set up to hone the small print in future securities legislation.

Instead, Germany had a clause inserted in the committee's remit that stated the Commission would "not go against the predominant view" of the Council of Ministers. This could give Berlin more leverage to block legislation it didn't like.

Lamfalussy said the Germans had "created an inhospitable environment and strengthened the Parliament's resolve to be the democratic watchdog".

His comments came as the securities industry repeated its warnings on prospectuses at a hearing at the European Parliament in Brussels. Cliff Dammers of the International Primary Market Association and Iain Richards of Schroder Investment Management told the economic and monetary affairs committee that the draft law would wrap companies in red tape.

• DEBT-stricken British electronics firm Marconi was given a lifeline after Brussels approved the 1.2-billion cash sale of its medical systems unit to Dutch rival Philips.

The architect of sweeping reforms in EU securities markets, has attacked the European Commission for steamrolling through the new laws. Baron Alexandre Lamfalussy said the EU executive had launched directives on sales prospectuses and market abuse without properly consulting those most affected.