DUBLIN - Charlie McCreevy, the European commissioner for the internal market and services, has called for restraint in the debate over hedge fund regulation in the EU.
McCreevy's remarks, part of a speech on aspects of the economic and financial crisis to the Institute of Chartered Accountants in Ireland, follow European president Jose Manuel Barosso's badly received April 30 draft directive for hedge fund regulation.
"Most commentators agree that alternative investments such as hedge funds and private equity were not the primary causes of the crisis," said McCreevy. "There has been, however, strong political pressure from all sides of the outgoing European Parliament for more regulation in this area."
OR&C learned in March from a Brussels source that some within the Commission were not enthusiastic about Barosso's promise to regulate the EU hedge fund industry, concentrated in the UK and Ireland, where politicians have vowed to oppose a heavy-handed approach from Brussels.
"President Barosso on behalf of the Commission promised to bring forward legislative proposals and that is what we have done," said McCreevy. "They will now be examined by the Council of Ministers and the European Parliament."
OR&C was also given to understand that the hedge fund regulatory draft was viewed by some within the Commission as a partly political stunt by Barosso in the context of his re-election campaign.
In his speech, McCreevy said: "I would hope that in the debate ahead people on all sides would bear in mind that Europe is going to need all the investment it can get to move out of the crisis. We must not end up making Europe an unattractive place for investors."
Now that the European Council has approved his re-election to a second term, the political will to pursue the draft directive - in its current unpopular form - might slacken, much to the relief of the embattled hedge fund industry.