Britain blamed for euro turmoil over hedge fund curbs block

Date: Monday, May 10, 2010
Author: AFP

Britain's refusal to entertain eurozone curbs on highly speculative investment fund managers has cost Europe dearly, former Spanish prime minister Felipe Gonzalez said on Saturday.

"Look at the hedge funds decision that was put off" in March, Gonzalez told reporters after unveiling a two-year, million-euro report into the European Union's future 20 years down the line.

"Because of elections," specifically "the general election held the day before yesterday" across England, Scotland, Wales and Northern Ireland, "we have all seen more and more speculative attacks, which are going to continue apace," he said in Spanish comments relayed through EU interpreters.

Spain was hammered last week as credit rating downgrades fuelled "speculative attacks," leading deputy prime minister Maria Teresa de la Vega to seek curbs including criminal charges on "anti-social" traders she said had deliberately "toyed with" her country's prestige.

Gonzalez said the trillions of dollars spent around the globe on rescuing the financial sector from the threat of collapse over the past two years had come back to bite politicians from behind.

Recalling public money spent bailing out banks and the financial sector worldwide since late-2008, he said "if you give somebody urgent money to help them out of a tight spot, they should give you a helping hand" in return.

Gonzalez, who said a eurozone-IMF bailout for Greece should have been agreed three months ago, instead of only being signed off late on Friday night in Brussels, refused to answer how much he thought a new euro-wide emergency fund due to be unveiled on Sunday should have in its coffers.

But he stressed that "if Europe undertook reforms, it wouldn't have a crisis 10 times bigger" to deal with.