Monday, 24 October 2016
Last updated 2 days ago
Mar 17 2010 | 1:49pm ET
A combative Angela Merkel blasted British Prime Minister Gordon Brown over the latter’s refusal to accept the European Union’s proposed alternative investments rules.
In a wide-ranging speech before the German parliament, the chancellor called Britain’s one-off tax on bank bonuses “half as sensible” as the bloc’s hedge fund rules, which would impose strict reporting and custody requirements and possible leverage limits, as well as possibly block foreign hedge funds and private equity funds from recruiting European clients.
“I work well with Mr. Brown, but his one-time tax on bonuses was only half as sensible as it would be if Great Britain agreed to hedge-fund regulation, as we’ve been negotiating,” Merkel said. “That’s what we need to fight for and we expect support.”
The British premier this week put the brakes on the hedge fund rules, telling his Spanish counterparts—who hold the rotating presidency of the EU—that the U.K. was not willing to accept a compromise on the proposal. The British fear that the rules will imperil the European alternative investments industry, the overwhelming majority of which is based in London.
But while demanding British support for measures that could hurt its economy, Merkel assured the Bundestag that Germany “won’t surrender” its own economic “strengths.” The chancellor was responding to French criticism of its trade surplus.
Merkel also proposed that, as a “last resort,” the EU should be able to boot countries out of the euro if they threaten the common currency’s stability. She said her comments were not directed at Greece, which is facing enormous budget problems and a potential default on its debt, but did warn against any “rash decision” to bail out the country.