City breathes a sigh of relief, but Brussels "postponement" comes at a cost, Spain insists on June deadline for new directive
City News Desk
Prime Minister Gordon Brown personally "intervened" to halt the progress of new legislation proposed by Brussels that will hit London based hedge funds and private equity firms hard, with restrictions on how to market to professional investors in the 27 member states.
According to the FT, Spain who holds the current presidency of the European Union is determined "to secure a deal on the proposed legislation by June".
The "postponement" on the vote to pass the Alternative Investment Fund Managers directive, means that any incoming government will have to immediately tackle the problem given that 80 per of Europe's hedge funds and 60 per cent of private equity firms are in London.
Syed Kamall MEP for London said from Brussels:
"This directive, as it stands, could reduce the value of millions of workers' savings and pensions and push much-needed investment out of the EU and hamper economic recovery. We need to take a step back now and look at how we can agree a more workable directive.
"This was no time for a hasty compromise at ECOFIN. The European Parliament will not even produce their version of the directive until July, so Ministers should take their time to think through the dangerous consequences of their proposals.
French and German officials are believed according to reports by the FT to be "frustrated at the failure to reach a deal" which will mean that a Conservative government will find it harder to make a deal if elected as the new government.
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