In a week in which French president Nicolas Sarkozy defended his country’s treatment and exportation of a substantial number of dislocated Romas, the same government has stirred controversy within the world of alternative investment.
And much like the emigration situation, there are those comparing the Sarkozy administration’s attitude toward the proposed legislation as archaic and stubborn.
The draft bill, first proposed to the European Commission in April of last year, has been held up by French representatives, who argue that it would reduce the influence a European state would have over fund managers based outside of but operating within the eurozone.
The legislation originally put forth in Parliament offered universal rules for such organisations, which would effectively grant non-EU fund managers a passport to markets in and throughout the EU. Many Member States favour the remaining private placement schemes – or individual national rules – on market access. The current Belgian presidency has offered a compromise which would harmonise the opposing ideas, allowing the passport principle to be realised by only a select few fund managers.
France’s finance minister Christine Lagarde argues the original proposal and any compromise is unacceptable.
Concerned for the ability of her government to directly impose regulation on non-EU fund managers, Lagarde has told Parliament that the legislation would leave France’s hedge funds and equity managers at a distinct disadvantage at home and across the EU.
Following a poor week for Franco-European relations, one hopes for a satisfactory conclusion on both political fronts. It was by no means a surprise that nationalist musings would spring from a worldwide financial crisis (particularly within the eurozone where the very constitution is based on the strong carrying the weak), with Germany and Greece furrowing their brows at one another earlier in the summer regarding repayments. However, the legislation tweaked by the Belgians in order to appease all factions was designed to directly aid recovery, but has instead offered Lagarde the opportunity to grind her axe at a politically fragile time.
Parliament had intended to conclude the issue this month, but has since put the vote off until late October.