Why I'm fighting against Europe's hedgie directive

THERE ARE many good reasons for catching an early Eurostar to the continent, and particularly to Brussels. A stroll through the magnificent Grand Place followed by a plate of delicious moules et frites remain two of my fondest memories of my time spent as the Daily Telegraph&rsquo;s Brussels correspondent some years ago. But my aim today is purely professional and central to my most important responsibility as Mayor of London &ndash; to champion what is good about this great city, safeguard its strengths and defend it from anything that threatens it.<br /><br /><strong>DANGERAHOY</strong><br />The latest attack comes not in the form of longboats, or an armada with cannons appearing in the Thames Estuary, but in the form of an EU directive aimed at regulating Europe&rsquo;s financial services sector. As with these missives, it is many pages long and one could be lulled into thinking it is just another piece of harmless, bureaucratic legislation. This time, however, it is potentially a dangerous attack on one of the biggest tax generating industries in the UK, the alternative investment fund.<br /><br />The European Commission&rsquo;s &ldquo;Alternative Investment Fund Management&rdquo; draft directive, published earlier this year, proposes highly damaging regulations that will affect, among others, the entire European hedge fund, private equity, and venture capital industries. It will also strike a blow against real estate trusts and other funds not technically falling under other EU regulations.<br /><br />As a result I am in Brussels to meet and personally lobby EU commissioners and make the case for London and the UK.<br /><br />Hard line Euro-sceptics would say their plans are a naked attempt by the Franco-German axis to undermine the competitiveness of the City of London, which is home to 80 per cent of Europe&rsquo;s hedge funds, provides 7,000 jobs and is an industry that yields billions in tax to the Exchequer.<br /><br />That&rsquo;s not my case. These plans are a knee-jerk reaction and, as a man of extreme moderation, I will only say I believe this directive to be a mistake on several counts.<br /><br />It is a mistake to attack the very sectors of the financial service industries that were relatively blameless in the recent crisis. It is a mistake to promote protectionism by making it more difficult, if not impossible, for non-EU based funds to invest in Europe. Moreover, it is a mistake, not just because this directive is against the interests of London and the City, but of Europe as a whole.<br /><br /><strong>AN OWNGOAL</strong><br />These businesses, based in London, are instrumental in allocating capital across Europe and allowing European companies to grow and invest across the community. If we allow this directive to go ahead unamended, these alternate investment funds will not migrate to Paris or Frankfurt, they will go to New York, Shanghai or Singapore.<br /><br />So my purpose today is to make this point as powerfully as I can to the commission and ask them to think again. I will be telling them that if they want to ensure that the world&rsquo;s greatest financial centre remains in Europe, then their directive must be scrapped or substantially amended.<br /><br />I am in no doubt that, if we can improve and protect our financial services industry, along with giving this city the infrastructure investment it needs, London will lead this country out of recession, as it did in the 1930s. I am also confident that we will prove once again that what is good for the capital is good for the UK and, above all, good for Europe.<br /><br />Boris Johnson is the Mayor of London.