Leaders of the Socialist group in the EU parliament criticised draft proposals by the EU Commission as being ??almost worthless?.
In a letter to José Manuel Barroso, the Commission president, they said the proposal was so ??filled with loopholes? that it would be ??highly ineffective? in regulatory terms.
Poul Nyrup Rasmussen, president of the Party of European Socialists and a former Danish prime minister, accused Mr Barroso of failing to live up to personal commitments given last year, and of falling short of the demands of this month??s G20 summit in London.
He thought it was ??a scandal? that the European parliament had had to wait six months for the legislation, only to find it so inadequate, and said the hedge fund issue would be ??central? to campaigning for June??s poll.
The proposed legislation has not yet been formally published by the Commission. On Monday, officials would say only that it was still being worked on. However, copies of the draft already leaked out before Easter.
The leaked draft suggests that the Commission plans to regulate managers of ??alternative? funds, rather than the funds directly. This is one of the main objections of the Socialist MEPs and the private-equity industry, who say it would mean that non-EU managers could still operate in the EU, and market their funds, without any effective oversight.
The Socialist group letter said: ??We consider it would be a major political mistake were the Commission to adopt such a proposal.?
