Accounting standards : a tool for the european strategic autonomy | terra nova

Accounting standards are at the heart of the financial system, since they shape how companies are represented, their strategies, their interactions with stakeholders and their growth

trajectories. Accounting standards are not neutral. They influence the economy and weight in on how we set direction for the future, such as long-term investment or research and development

spending.  For Europe to cease being naïve and to recover a sovereignty it has largely renounced to, it must adopt tools that are inexpensive, easy to implement and will allow to defend its

own interests in a world where the future is characterized by a high level of uncertainty.  In order to contribute to such new strategy, we recommend three concrete measures, at the legal

and institutional level; they will contribute to ensuring the right decisions are made for Europe to facilitate long term investment as well as European autonomy and resilience. First, we

are proposing to provide the European Commission with the legal tools to reject or amend parts or all of an accounting standard should its fundamental interests be at stake. We are also

suggesting amplifying the financial and intellectual resources of the European bodies doing the ground technical work to support the Commission, by creating a European Agency. Finally, we

are recommending clarifying the European public good criteria that is used in the endorsement process. IFRS standards should be adopted only if they do not contradict the fundamental

European public policy objectives, such as the ecological transition and addressing climate change. Reappropriating sovereign powers over the governance of accounting standards setting is

not simply the waking up of a continent in search of pride and sovereignty. It is essentially a pragmatic approach to respond to the major challenges and the very interests of current and

future generations.