Tuesday, 26 July 2016
Last updated 4 hours ago
Oct 14 2010 | 1:28am ET
The European Union's proposed alternative investment regulations hang in the balance once again as talks to reach a compromise failed today.
European diplomats were unable to break the deadlock between the U.K. and France, which last week announced it opposition to granting foreign hedge funds access to all 27 EU countries, but later indicated a willingness to accept the so-called "passport" in exchange for other concessions.
Agreeing on those concessions now falls to Christine Lagarde and George Osborne, the French and British finance ministers. The two are expected to attempt to reach an accord in advance of next week's meeting of EU finance minister, where it is hoped a deal can be reached.
One of the non-starters in this week's negotiations were a plan that would allow EU countries to decline the passport agreement.
"Britain believes this would be an opt out," one diplomat told Reuters. "It allows member states to pick and choose."
The U.S. is pushing hard for a version of the passport that will be available to foreign hedge funds. In addition, the European Parliament, which must approve the alternative investments directive alongside EU governments, is also demanding it.
One diplomat underscored the urgency of reaching a deal next week.
"If there is no agreement now, it is going to last for another two years," a diplomat told Reuters.