In These New Times

The European Union, led by France and Germany, have refused to wait to bring in new controversial regulations on Hedge Funds which would in effect close the market to international funds.

This is exactly what is required and hopefully British objections will be overruled.

E Gov Monitor

14th May, 2010

The relationship between UK and the rest of the European Union has always been bit trickly and in the past few days it has  become downright difficult.

Earlier in the week Jean Pierre Jouyet, the French market regulator warned Britian that when the economic crisis hits the British Isles it must not expect to receive any help from the Europen Union partners.  Coming from Mr. Jouyet,  a close confidant of President Sarkozy, this seems to be a message from the very heart of the French Government.

It seems France extremely unhappy with the UK decision not to contribute to the  500 Billion Euro bailout mechanism that was approved by the ECOFIN (European Council Of Finance Ministers) last week. The, then Chancellor Alistair Darling made it very clear, that Euro zone needs to shore up the Euro.

However, Sweden and Poland, both not members of the Euro decided to contribute towards the bailout fund.  Mr. Jouyet told Europe 1 radio

“The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you. If you don’t want to show solidarity to the eurozone, then let’s see what happens to the United Kingdom,” he added, “there is not a two speed Europe but a three speed Europe. You have Europe of the euro, Europe of the countries that understand the euro…and you have the English,”

The Hedge Fund Regulation

The European Union, led by France and Germany, have refused to wait to bring in new controversial regulations on Hedge Funds which would in effect close the market to international funds.  The British Government had requested the vote be postponed so that the new coalition government especially the new Chancellor could be fully prepared to participate in the Finance ministers meeting.

It seems that neither Germany or France are willing to wait any longer. Like on the Euro bailout, there is no policy difference between the Cameron and the preceeding Brown administrations in the UK.

Earlier Elena Salgado, finance minister of Spain,  told the Financial Times

“We have a sufficient qualified majority, “There is a very clear majority of countries that want to approve it. After that, there still has to be the dialogue with the [European] parliament . . . [But] our intention is to approve it.” A senior German official said: “We want this put to a vote next week.”

Both the UK and the US object to these new regulations, and the US Treasury Secretary wrote to the EU officials in March articulating this regulation as potential cause for difficulties in US -EU economic relationship as it locks out US firms to operate effectively within the European Union.