Tide is turning on private equity and hedge funds

27 September 2007

Poul Nyrup Rasmussen, President of the Party of European Socialists, welcomed the announcement by British Prime Minister Gordon Brown that he will close tax loopholes used by private equity funds.

“There is a problem with private equity and hedge funds” said Poul Nyrup Rasmussen, “and serious politicians know it. Yesterday’s excellent announcement by Gordon Brown is just the latest in a series of setbacks for those who want private funds to continue to play outside the normal rules.”

“But there is one politician who does not seem to be serious about it, and unfortunately that is the European Commissioner who should be taking action, Charlie McCreevy. Action is needed at the European as well at national and international level.”

“It is absolutely absurd that private equity and hedge funds are not subject to the same rules – of transparency, of disclosure, of tax – as every other player on the financial market. It is very frustrating that Charlie McCreevy does not grasp that there is a problem here.”

Rasmussen added “The tide is turning and Charlie McCreevy will not be able to hold back the waves much longer. The German Social Democrats, the British Labour Party and US Democrats and many others – including the European Central Bank – know that there are issues that need to be discussed and dealt with.”

In an article published yesterday in El Pais Poul Nyrup Rasmussen warned that two thirds of new debt was now generated by these private equity and hedge funds, and that debts accumulated by these private funds would cause new financial crises – similar to the one triggered by bad American mortgage debts - in the future.

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Julian Scola, Communications Advisor - Media & Campaigns
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