EU socialists urge G8 to act on capital funds

Centre-left politicians on both sides of the Atlantic today urged this week's G8 summit to tackle the “threat” posed by capital funds.

A conference in Brussels, organised by the Party of European Socialists (PES), said there was "growing" concern about the influence of private equity and hedge funds.

Danish MEP Poul Nyrup Rasmussen, one of the speakers at the event, said that such funds are "too often motivated by the desire to make a lot of money fast, with no respect for jobs, workers or long-term investment."

He has written to German chancellor Angela Merkel, whose country currently holds the rotating EU presidency, urging her to raise the issue at the G8 summit of world leaders in Germany on Wednesday.

"Europe needs investment, not asset-stripping. We do not need healthy, sustainable companies to be bought up by private equity or hedge funds that will maximise shareholder profits by making workers redundant and selling off parts of the company."

"Healthy companies should be protected from these financial predators," said Rasmussen, who is PES president.

"This is not some minor problem. Private equity funds control around four million workers worldwide. The last five private equity deals are larger than the annual budgets of all but 16 of the world’s largest nations."

At the conference, Rasmussen, a former Danish prime minister, took part in a live satellite link with top US democrat congressman Barney Frank, chairman of the financial services committee.

Other speakers include Piero Fassino, leader of the largest party in the Italian centre-left coalition government, Elio de Rupo, leader of the Belgian Parti Socialiste, and European trade union confederation president John Monks.

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