Policy stories

In your article “Talks on hedge-fund regulation” (20-26 May), you set out the positions adopted by European Commission, the European Parliament and EU finance ministers for the draft Alternative Investment Fund Managers Directive.

“Member States and the EU should encourage greater levels of venture capital in innovative companies at all stages, addressing in particular the market failures in innovative and creative start-ups, in order to leverage private investment; To this end, efforts should be devoted to create favourable conditions to foster a growing and robust European venture capital market, making possible the stable participation of private investors(…)

“Top European Union officials hit back on Thursday at criticism from Tim Geithner, US Treasury secretary, who has accused Brussels of pushing ahead with rules to regulate managers of hedge funds and other alternative investment funds that could be protectionist.
A spokesman for Michel Barnier, the new EU internal market commissioner who is responsible for financial [...]

The European Commission outlined its priortities today for 2020 including the intent to make “an efficient European venture capital market a reality” and explore “incentives for private sector funds that make financing available for start-up companies, and for innovative SMEs.” This is part of a wider call for an “Innovation Union” to solve the challenges facing Europeans like climate change, energy supply and demographic change.

Europe produces more research papers than the US or Japan but needs an influx of venture capital to turn inventions into commercial success, according to Máire Geoghegan-Quinn, EU commissioner for research, innovation and science.

Geoghegan-Quinn cited the example of the MP3 standard for compressing audio files, which was invented in Europe but commercialised in the US.