The Deficits of the EU Financial Reforms

Almost one year after financial market turmoil triggered a financial and economic crisis in the countries of the European Union (EU), many reforms of the financial sector are still not in place and destabilising practices are continuing. Political agreements at several high-level international and European meetings still need to become legally binding through EU directives and the subsequent incorporation into national laws. Will the financial sector reforms currently proposed at the EU level guarantee financial stability and protect the real economy from financial speculators? More importantly, will they create financial instruments at the service of the public interest and sustainable societies, and tackle the systemic causes that also are related to the food, environmental and poverty crisis? This briefing provides a critical analysis of a selection of the European financial reforms that are being discussed and decided upon in the second half of 2009 and beyond. An in-depth explanation of the EU financial reform proposals that are discussed in this paper, as well as the terminology and the political decision-making processes at EU level, can be found in: “An Oversight of Selected Financial Reforms on the EU agenda” (See on the SOMO website online).