Europe to hold PE debate

The European Parliament is to conduct a debate into the role of private equity and hedge funds in the EU economy following months of media, political and trade union pressure.

The discussion has been launched by the Party of European Socialists (PES), the political block that represents left-wing parties in EU member states, including the UK’s Labour Party with Prime Minister Tony Blair one of six PES representatives on the European Council.

The debate is to be held on March 29 between 14.00 and 17.00.

The European Venture Capital Association has welcomed the conference. Javier Ecahrri, EVCA secretary-general, said: “EVCA is fully supportive of open debate around private equity and venture capital, and welcomes any opportunity to address misconceptions surrounding the industry. Private equity and venture capital has a very positive story to tell, not only in terms of job creation in existing as well as new companies, but also in terms of its industry standards, the most advanced of any alternative asset class. We stand ready to assist the PES Group and the European Parliament and look forward to continuing our dialogue together.”

The debate comes at a time when private equity has become a target of attacks by trade unionists, and not just in the UK. In early March, at a seminar organised by the PES in the European Parliament, trade unions called for a strengthening of the rules on disclosure and worker consultation in the light of what they called the “growing influence of hedge funds on companies.”

“The biggest danger facing workers today is not China, but the financial markets,” said John Monks, General Secretary of the European Trade Union Confederation (ETUC), and former general secretary of the Trade Union Congress, the UK trade union federation which counts around 7 million members. “Today, one-sixth of the private sector in the United Kingdom is controlled by investment or hedge funds whose sole raison d’être is financial profit,” he continued.

One of the main demands by the trade unions at the seminar was to be informed at a sufficiently early stage about any restructuring. “At present, we are informed after the fact rather than about any future plans. We have no industrial vision of the company. Pre-emption of restructuring is essential,” insisted Patrick Itschert, Secretary General of the European Trade Union Federation for Textile, Clothing and Leather.