Gordon: Guess what? The city is stuffed!
The economic future of the UK took another hit recently when their European partners, Sarkozy, Merkel and Salgado refused Britain's request to delay European legislation which will undermine London's ability to operate as per usual.
The following is an excerpt from the Financial Times which summarizes the situation very well indeed:
European Union countries led by France and Germany plan to push through controversial new hedge fund regulations next week after turning down British pleas to defer a vote in Brussels.
The refusal by Paris and Berlin to delay a decision on the rules, which are opposed by the UK, has set up a bruising early confrontation with David Cameron's new government.
British diplomats tried on Wednesday to persuade Paris and Berlin that Mr Cameron's coalition needed more time to prepare for Tuesday's meeting of EU finance ministers.
But Nicolas Sarkozy, French president, and Angela Merkel, German chancellor, are determined to settle a new regulatory framework on hedge funds and the private equity sector, which they claim were partly to blame for the financial crash.
Elena Salgado, finance minister of Spain, which holds the rotating EU presidency, said other finance ministers would not agree to a further delay.
"We have a sufficient qualified majority," Ms Salgado said in an interview with the Financial Times. "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."
Britain looks certain to lose any vote and George Osborne, chancellor, could be forced to swallow plans requiring greater transparency from hedge funds and private equity groups.
The measures are opposed in the City as being excessively onerous. London is Europe's main private equity centre and home to 80 per cent of its hedge fund industry.
The directive has also caused concern in the US. In March, Tim Geithner, US Treasury secretary, wrote to EU officials warning that, if unchanged, the new regulations could trigger a transatlantic rift by unfairly locking US funds out of European markets.
"The Americans are going absolutely ape," said a person involved in the negotiations. "There's this overwhelming belief now in Europe that if we legislate first, then the US will follow what we do."
Under the new rules, hedge fund managers and private equity firms could be forced to curtail the amount of leverage they use, make regular disclosures about their portfolios and would be forced to hold their assets with European banks.
Non-EU hedge funds could face similarly exacting requirements if they wish to market themselves to EU investors. Managers and investors have said the proposed changes could force much of the industry from Europe.
The proposed directive is a poison pill left by Gordon Brown, the former prime minister, who persuaded the Spanish presidency to delay a vote until after the May 6 election.
The issue will be an early test of relations between Mr Cameron's government and the rest of the EU. The Tory leader has insisted he does not want a fight with the EU in spite of his party's eurosceptic stance, but he is regarded with suspicion by Mr Sarkozy and Ms Merkel.
To read the article in full please click this link.
Well, Gordon has left David with his starter for 10, as the game show used to say. David Cameron may just find his back bone and say NO, just as the French have done many times in the past when it didn't suit them. Or, he could call for a referendum on the UK staying in the EU and allow the British people to decide their own future, maybe not.
We are of the opinion that one size does not fit all in the European space, it is not the same as the United States, Greece and Germany, for instance, are poles apart economically as one needs to raise interest rates and the other needs to lower them.
Its all interesting stuff, sometimes we wake up on a morning and think that we are living in the middle of an Agatha Christie novel, exciting and mind boggling at the same time. Interesting it might be, however as 75% of British law emanates from Brussels it really is only a side show. The unelected commissioners rule eurozone and most of them are career politicians who have never had a proper job, enough said.
Keep smiling its all falling into place for gold and silver bugs.
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