It might be for them, but clearly the British government, which has caved in on this and so many other issues involving the giant steamroller that is the EU, has already made its mind up about the future of the United Kingdom of GB and NI. The fight was fought and lost when we were denied the referendum on Lisbon/the Constitution. Whatever follows - and this is just the start of it - I for one fear that the blind Europhiles (and they inhabit every mainstream British political party), who've somehow been hoodwinked by the socialist-federalists into believing that if you allow unelected, faceless Brussels officials to pass laws your country must obey, you are somehow not selling out the electorate of that country, have already done the permanent damage. Against the wishes of 65%+ of the UK population, and a majority of the people of the rest of Europe, too, it really looks like they might have won. They are about to take down the City, an institution that has long been in their crosshairs. The only question left to ask, powerless spectators as we now are, is "what will be next?"
When I warned against the EU’s Alternative Investment Fund Managers Directive five months ago, some of you felt I was laying it on a bit thick. And it’s true that my language was strong: “The City is staring into the abyss,” I wrote. “If the proposed EU directive on hedge funds goes through, London will go the way of Bruges, Venice and Amsterdam: a once dominant financial entrepôt sidelined by more virile cities.”
If you still think I was exaggerating, read this. So much for the idea that the most objectionable parts of the proposal were likely to be modified. Responsibility for the oversight of financial services will be shifted, with malign and irrevocable consequences, to the EU. London will be regulated by Brussels. Three new EU institutions will be responsible for invigilating an industry which, while marginal in most EU states, is critical to the United Kingdom. Like all bureaucracies, these institutions will enlarge their remit year by year until they bear no resemblance to the agencies originally envisaged. Those who mislike and mistrust Anglo-Saxon capitalism will at last be in a position to control it. All to solve a non-existent problem.
What are you waiting for, you hedgies, you derivatives traders, you bankers who see no reason why the state should dictate the terms of your contracts, you pension fund managers, you City solicitors, you who work in the ancillary industries, from conference organisers to chauffeurs? Are you all planning to join the emigration queue? Isn’t it at least worth putting up a fight?
Incidentally, the article to which Hannan refers in the first paragraph reads as follows:
A pan-European watchdog should be given powers to stop short-selling, according to a European Union report that also calls for tough sanctions against hedge funds that fail to curb pay, borrowing and risk-taking.Even if we wanted to fight back, I'm really not certain we can any more. Nature - or rather history - will simply have to run its course. That history (or rather future) does not look good for Britain on the strength of this piece of evidence. It doesn't look good for Europe either, frankly. The will of the people always triumphs in the end, one way or another.
The European Union is examining new rules for the funds and others. This week, Jean-Paul Gauzes, a French member of the European parliament appointed to broker a deal on the law, will issue a report outlining the direction the EU should take.
In the document, obtained by Reuters, Gauzes writes: "In exceptional circumstances and in order to ensure the stability ... of the financial system ... the European Securities and Markets Authority (a proposed new body) may take the decision to restrict short-selling activities".
He wants the authorities to be able to "impose a temporary prohibition of professional activity" or "request the freezing ... of assets."
Britain, which itself imposed a ban on short-selling at the height of the crisis, could view the bid to cede power to a European watchdog as an attempt to dilute its influence over London, home to most European hedge funds.
Gauzes' recommendation goes further than most had expected and is twinned with other proposals to clamp down on hedge funds and other specialist financial investment groups.
He also calls for powers for the European Commission, the EU executive, to allow it impose caps on borrowing by a hedge fund.
"It is considered necessary to allow the Commission to impose limits in exceptional circumstances on the level of leverage that Alternative Investment Fund Manager could use," he writes.
Both the European Parliament and the bloc's member states share responsibility for writing the final version of the law and Gauzes, who has been appointed to broker a deal in parliament, is central to the process.
FRANCE VS BRITAIN
Gauzes' views are likely to have the backing of France and will be a setback to Britain's attempts to water down the proposed rules to protect London, Europe's financial capital and a major driver of Britain's economy.
Short-selling typically involves an investor borrowing shares and selling them on in the hope that the price will fall and he can repay the lender with stock bought for less. The British government temporarily outlawed the practice when its big banks, already teetering on the brink of collapse, were further undermined by short-sellers.
Gauzes now wants the funds to give extensive information about how they are investing as well as agreeing to cap the amount they will borrow, which many will see as restricting the much-prized freedom to switch investment strategies quickly.During the crisis, hedge funds have come under increasing suspicion, prompting the European Commission, or EU executive, to draft rules to keep close tabs on a group that one politician has dubbed locusts.