EU Members Divided Over Transparency Directive

by Ulrika Lomas, for LawAndTax-News.com, Brussels

12 November 2003

The European Union is divided over proposals contained within a new Transparency Directive which would oblige all firms listed in the EU to report on a quarterly basis.

According to reports in the regional media, the United Kingdom, Denmark, the Netherlands, Austria, and Ireland all expressed their displeasure with regard to the proposals at a recent ECOFIN meeting.

In a statement released after the meeting, UK Chancellor of the Exchequer, Gordon Brown explained that:

"The Transparency Directive is a directive that rightly wishes to see greater transparency as a protection for investors, but it also involves costs for business. We are working on a formula that allows costs to be cut for firms."

The main objection raised against imposing a quarterly reporting obligation on the 7,000 listed companies in the EU is that, in conjunction with the requirement for continuous disclosure of material information which already exists in European law, the additional burden could prove too much for smaller firms.

However, according to the LMG news service, speaking at the ECOFIN meeting, Internal Market Commissioner, Frits Bolkestein dismissed the objections to the directive raised by the five member states, arguing that:

"Any manager worth his salt should in any case have these figures at his disposal and should be able to produce them easily. Quarterly reporting obligations have existed in the US for decades and if US companies can do it, EU companies can too."

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