EU hedge fund curbs delayed: presidency
(BRUSSELS) - Plans for European finance ministers to vote on controversial new laws curbing the hedge fund industry on Tuesday were dropped at the last minute, the EU's Spanish presidency said.
"Hedge funds are off the agenda to allow more time for us to obtain the maximum level of support possible," said spokeswoman Cristina Gallach.
"It will come back in during a later meeting of finance ministers during the Spanish presidency."
Diplomats last week said that the issue would be put to a vote, and that Britain was isolated.
But vigorously expressed opposition from London, in the run-up to a general election there, appears to have killed a continental appetite to use a majority to ram through changes.
"We still have to work on this," Spanish finance minister Elena Salgado, chairing the talks in Brussels, said on her way into the talks.
Britain's Chancellor Alistair Darling did not make any comment on his way in, but Swedish counterpart Anders Borg suggested that the terms of the discussion had shifted towards ensuring Europe was not applying "protectionist" measures via the back door.
"We'll have a discussion today and we obviously need more regulation," he told reporters. "But there is no space for protectionism in Europe."
US Treasury chief Timothy Geithner complained last week that the draft directive might damage US hedge funds, private equity groups and banks by curbing their ability to do business with Europe.
European Commissioner for financial services, Michel Barnier, is to travel to the the US in the coming weeks to discuss sticking points concerning access to the EU single market for fund managers based in Europe but whose money is held outside the EU, in the Cayman Islands or other tax havens.
Opponents say the law changes would hasten the flight of top funds from London, where between 70 percent and 80 percent of Europe's high-end financial services sector are found, to Switzerland or elsewhere outside the EU.
EU finance ministers had been called to agree on a "general approach" following heated talks between ambassadors on Thursday, but could decide to send the long-running issue back to national negotiators.
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