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US polls may delay reforms, says Karas

Friday 17 September 2010 - by Will Henley

The European Parliament’s rapporteur for the proposed EU capital requirements directive has predicted that global financial reforms may be much “more difficult” to agree following next month’s US congressional mid-term elections.

MEP Othmar Karas revealed he was pushing the European Commission to engage sooner rather than later with US authorities as polls predict that President Obama’s Democrat Party could lose control of the House of Representatives, restricting his capacity to force through reforms.

He says: “After the elections in November I think the process to implement the global framework in the United States will be much more difficult. This is why I am pushing the Commission to start a parallel dialogue [with US authorities]. The time is now.”

Karas, a member of the Committee on Economic and Monetary Affairs, was speaking at the unveiling of a survey of MEPs attitudes on financial reform, which revealed that many MEPs believe that the United States was to blame for the international financial crisis.

Karas resisted fellow parliamentarians’ attempts to blame America. He says: “Yes, some aspects were started in the United States, but it is a global problem. It is not just a case of being [the responsibility of] the United States or Europe – everybody has a responsibility.”


However, raising concerns about the possible effects of Basel III, Karas urged the Commission to undertake an urgent study into the "cumulative effects" of all proposed reforms.

He says: "Nobody knows really about the consequence on the real economy of the decision of the Basel Committee. My worst fear is that we have a negative effect on growth and employment and a negative effect on the banks.”


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