The European Commission, the executive body of the European Union, plans to voice objections to U.S. Treasury Secretary Geithner regarding the controversial Volcker Rule, arguing that it has potentially disastrous complications for the global economy.
Michel Barnier, the European commissioner for the internal market, plans to speak with Geithner next month about the rule, which prohibits U.S. banks from engaging in risky investments, according to the Wall Street Journal.
The commission's objection comes after a Monday meeting between Barnier and U.K. Chancellor of the Exchequer George Osbourne. As European countries struggle to stay afloat amid the zone's debt crisis, many critics are concerned that the Volcker Rule's widespread implications may impede European markets.
Japan and Canada have already voiced concern with the U.S. government over the rule, contending that the rule would effectively limit the business practices of U.S. subsidiaries overseas and affect the foreign bond market, the Wall Street Journal reports.
Barnier's participation is expected to put further pressure on the federal government to revise the proposed legislation.
“Anything that has a prospect of limiting the Volcker Rule would have an impact,” an executive at a major U.S. Bank said, according to the Wall Street Journal. “But is it real? That is the question. Is this something Geithner looks at and says 'We have to get the European economy moving again' or is it just more complaining that they will ignore?”