Speech by Romano Prodi
President of the European Commission
"The Financial Services Action Plan"
Press conference with Commissioner Frits Bolkestein
Brussels, 3rd June 2002
As you know, we have been working very hard to build an integrated European financial market.
For the first time - that vision is within reach. One money, and one single capital market with one set of financial rules - and efficient, fast track decision-making. By 2005, as agreed in the Lisbon European Council.
At last real change is underway.
Today we are bringing forward another group of important proposals. Frits Bolkestein will outline these proposals in more detail in a moment.
Firstly, we're releasing the latest progress report on the Financial Services Action Plan. It reflects a significant change in the political climate and concludes that there has been "real and tangible progress".
Secondly, we're also presenting a proposal for a Directive amending the existing European Union Accounting Directives.
This proposal brings existing EU rules into line with current best practice. It complements the International Accounting Standards Regulation, due for final adoption by the Council in the coming days.
The amendments now proposed to the Accounting Directives would allow Member States that do not apply these standards to all companies to move towards similar, high quality financial reporting.
A couple of weeks ago we also issued a Recommendation on Auditor Independence - a highly topical initiative in the light of the recent Enron scandal - and today we are presenting a proposal to amend the first Company Law Directive to make it easier for companies to disclose required information.
Shortly we're going to table a proposal for a Fifth Motor Insurance Directive. The aim is to make life easier for vehicle users travelling within the EU, by addressing problems that they frequently encounter.
We need a system that makes it as easy as possible to get insurance cover, for whatever circumstances may arise. That cover needs to be effective across borders. It also aims to improve protection for pedestrians and cyclists and to make it easier for customers to change insurance provider.
Tomorrow the Council is expected to reach a first agreement on the pension funds directive. There will be more choice, lower cost and better returns. These gains could be large for every European. For mortgages, insurance polices - families will be better off and more secure.
The Council is also in the process of reaching common positions on the proposals related to the simplification of the Life Assurance directives, financial conglomerates and market abuse.
In short, European financial history is accelerating.
An integrated capital market will be of great macroeconomic benefit to the EU. The cost of capital will fall - so GDP will rise. Some say by half of one percent a year, on a sustainable basis. If GDP increases, so will jobs as well.
But most importantly, delivering this Plan matters to every European citizen. There are major social benefits and we must spread this message much more widely. People will get better value from the biggest investments they make in their lives.
That is why we want one set of rules, not 15. This means increasing competition and financial innovation and scrapping useless cross border bureaucracy.
Take the euro, for example: from 1 July - for the euro there will be lower charges for taking out cash and making card payments abroad. As you know, I fought very hard for this and now we're ready to deliver.
The Plan means as well rigorous rules to hound out the financial frauds and cheats - so investors are properly protected. Tough measures to avoid money slipping to terrorists and drug barons. Avoiding scandals like Enron with deployment of the best accounting rules in the world, properly enforced - and new independence principles for auditors
Political momentum is building up. The Spanish Presidency has skilfully helped us forward. The European Parliament has also played its role - by acting swiftly, positively and co-operatively.
Today I call on political leaders, on the European Parliament, on the Council, on market leaders, investors, consumers and regulators to continue to support us. Help us drive the process forward.
This project is about delivering an integrated financial market. It is now in reach. This will build confidence and greatly strengthen the European Union.
Finally, tomorrow I'm meeting with the personnel of the Commission to mark the mid-term of my mandate. In two and a half years we have achieved a lot and I want to use this opportunity to thank my staff for all the hard work they've done.
Euro, Convention, enlargement, Doha, fight against terrorism, liberalisation of energy markets, telecommunications, Galileo, new rules on food safety, car sales, bank charges, financial services… The list of achievements is long and is growing every day:
Almost two and a half years ago I promised to the Parliament that I'd be committed to closing the gap between rhetoric and reality in Europe. I said that my Commission is committed to deliver and this is exactly what we're doing - we deliver.