France managed yesterday to muster the support of three EU states against adoption of an accounting rule opposed by banks, raising doubts that the European Union can back the rule in its current form, EU officials said.
At an EU government and European Commission officials meeting in Brussels, France, Italy, Spain and Belgium expressed concern that the disputed bookkeeping rule, IAS 39, would make banks' earnings volatile.
Widespread scepticism of the standard appears to favour banks, which have asked the Commission to postpone its adoption until it is amended.
EU diplomats said 15 out of 25 EU states want to adopt the standard, while six, including Germany, have not made their positions clear. Those who spoke in favour of the standard were Britain, the Nordic countries and the new EU member-states.
Around 7,000 stock-market-listed companies are due to start using International Financial Reporting Standards (IFRS) on January 1st to improve the quality of financial reports and to allow investors to compare accounts across countries.
The Commission has asked EU member-states to confirm their views in writing by June 30th.
"The Commission will decide whether or not to endorse IAS 39 once it has the definite view of the member-states," Commission spokesman Mr Jonathan Todd said.
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