FRANCE has sent detailed proposals to the European Commission calling for common action to regulate volatile commodities markets before it is due to head the Group of 20 economic powers, ministry officials said.
President Nicolas Sarkozy said last week that regulating commodity derivatives would be one of the priorities of France’s presidency of the G20 starting in November for a year.
France’s economy, energy and agriculture ministers sent a letter to three European commissioners on 27 August stressing that current European regulation was not enough and calling for coordinated and cross-sector EU action.
“At a time when commodities markets are more and more financial, the European regulation of commodity derivatives markets appears insufficient to us,” the ministers wrote in a letter made public by the economy ministry.
The derivative markets cited in France’s proposals include grains and other raw agricultural products, metals, oil, gas and CO2 quotas.
European commodity markets are under pressure to tighten regulation as the United States pushes forward with plans to tame speculative activity, which was blamed by some for boosting food and energy prices to record highs in 2008.
France wants the EU to adopt new legislation to improve its own system but also hopes to convince its European counterparts to put forward a joint proposal at the G20.
In February farm ministers from the Organisation for Economic Co-operation and Development (OECD) failed to produce concrete measures on market regulation at a meeting on price volatility as differences surfaced on several issues.
City A.M. Reporter