In the most aggressive call for change yet, three leading socialists have given the European Union’s executive arm until mid-March to draft regulation for the private equity industry.
In an open letter to Jose Manuel Barroso, the European Commission president, Poul Nyrup Rasmussen, Martin Schulz and Pervenche Beres collectively asked what was going to be done about private equity.
In order for a law to by passed by the EU, the Commission must first propose the changes, which then must be approved by the EU member states and finally by the parliament. A consultation has already been launched on hedge funds which Barosso has explained is to decide on the content of the initiative.
Commissioner McCreevy, who has defended the private equity industry in the past, was singled out by the trio in the letter. “We do not understand how Commissioner McCreevy’s faith in voluntary codes of conduct for private equity is compatible with the assurance we have received from you.”
They conclude the letter by saying: “We underline not only that action is needed, but that it is needed urgently. We expect to have proposals in time for the next European Council of 19-20 March.”
In November a report drafted by the EU Parliament called for tighter reigns to be placed on the private equity industry.