The first shots have been fired in what may turn out to be a long battle for Britain’s new finance minister, attending his first meeting in Brussels with his 26 EU colleagues.
George Osborne did not speak at the meeting, and was outvoted on new rules for hedge funds and private equity groups which some analysts say will curb investor choice and make it harder for fund managers to work across the EU’s single market.
London is home to 80 percent of the EU’s hedge funds and there are fears Britain’s key financial sector will be crippled by the changes. However the changes are part of pledges made by world leaders to prevent another financial crisis.
“What we have in front of us are six big issues that underline the exigencies of transparency, responsibility, monitoring, and prevention to which we have committed at the European Council, to our citizens, and to the G20 at least three times. We have to deliver,” said EU Financial Services Commissioner Michel Barnier.
The new rules are likely to take effect around 2012, and until then there will be a lot of arguing and horsetrading on their scope, which will be closely followed on the trading floors of London.