Damages Actions, Oil Prices and Bankers

9.00 Check through voting lists for ECON committee meeting later on and sign amendments for submission on damages actions. Then I have an hour of French conversation (lesson) followed at 11.00 by an hour long meeting with the ECON committee staff on the recent Basel 2 directive and comparison with aspects of Solvency 2. This was my idea and it proves useful. It seems to me that it will be difficult for the Parliament to deal with the level 1 (framework directive) issues if we do not have sight of the detailed proposals for level 2 measures. Some potential here for inter-institutional aggravation.

12.30 Preparatory meeting of our Groups’s ECON members, no big issues to discuss so finish by 13.00. Return to office and complete second batch of amendments on damages actions. Review amendments on the report on the ‘macroeconomic effect of oil prices’ that we will be discussing in ECON and for which I am shadow Rapporteur. Quite a lot of the amendments overlap with mine, so good prospects of achieving agreement on compromises.

15.00 ECON meeting until 18.30. We vote among other things on extension of VAT exemption, which I shadowed, and discuss oil prices. The main point of contention is over how much to blame speculation and hedge funds and how much futures and hedging are beneficial for adding liquidity to markets. Hopefully we can acknowledge a dual role, some good, some bad. The Rapporteur liked my amendments, especially those pointing out the need to separate infrastructure from supply. I recall how difficult it was to accept this concept in the UK originally, but we do now have the proof that it works - last winter, due to the European interconnects and market NOT working, the UK had the highest wholesale gas prices in Europe but still the lowest retail prices.

I handed copies of my damages actions amendments to the Rapporteur of that report for his advance information. He did not look too dismayed.

18.30 to 20.00 Annual reception of the British Bankers Association. Conversation inevitably fell as to whether any progress had been made in the ECOFIN (Finance ministers) meeting on the Payments Services Directive which we voted in Committee in October. I am shadow on this and we have had several meetings with the Finnish Presidency and Commission trying to reach a first reading deal to put to plenary. However it is not going as well as hoped and things seem bogged down in Council, so from the Parliament side we are saying we will go to plenary and force a second reading if they do not get on with it. This would not be a good result for industry because they need the certainty of the framework directive to put the Single European Payments Area structure in place for January 2008 and a second reading would use up all the time. However if the Council muck about and waste time now we could end up having to do a second reading anyway, just even more delayed. Meet Charlie McCreevy and he says he is putting the pressure on as far as he can as well.