May 18, 2010 / 6:20 PM / 8 years ago

Osborne says played bad hand well on EU debut

BRUSSELS (Reuters) - George Osborne never had a hope of winning Tuesday’s European Union fight on hedge fund regulation but the new British chancellor left his first international meeting saying he played a bad hand as well as he could.

A week into Britain’s new coalition government, officials had already set the scene for defeat at the EU finance ministers’ meeting in Brussels.

The discussions on tighter rules for hedge funds were already too far gone and there was little the new administration could do to prevent EU agreement, they said.

They were right. But Osborne, making his debut on the world stage, said he had managed to win a valuable concession from the meeting in that Britain’s reservations were recognised in the EU statement thanks to “constructive” diplomacy over the last few days.

“I came with a challenging position bequeathed to me by the previous government,” Osborne told reporters after the meeting, known as Ecofin. “I am very pleased the Council’s minutes reflect the concerns I had.”

At 38, Osborne is the youngest British chancellor in 120 years. After 13 years of a Labour government, he is also the first Conservative chancellor to visit Brussels since John Major’s administration was locked in battle with the EU over its ban on British beef because of concerns about mad cow disease.

While many in his party remain Eurosceptic and bristle at any mention of Brussels, Osborne is clearly determined to dispel any notion that the new government will interact any less with the European Union -- Britain’s biggest export market.

“It is very important for me to show today the Conservative government with the Liberal Democrats is going to engage actively,” he said, noting he had several bilateral meetings and expected to build strong relations with other ministers.


It seems to be working. “I can say, although it may harm him, he was pro-European,” said Polish Finance Minister Jacek Rostowski.

Aides made much of him of “arriving early and leaving late.” Travelling with a small Treasury team, Osborne got into Brussels on Monday night and left only on Tuesday evening, having missed his afternoon train because of the meeting and news conference.

This was in contrast to former Labour Prime Minister Gordon Brown, who when chancellor between 1997 and 2007 was often criticised by EU colleagues for flying in at the last minute and leaving before lunch.

Osborne seems to be having a good time. “I very much enjoyed my first Ecofin,” he told an unusually packed news conference. “There was quite a good moment when the Greek finance minister was explaining the importance of budget restraint.”

Osborne is well aware that tough times may lie ahead and he noted his concern about the health of the European economy and that all countries deal with their fiscal problems.

“We were swimming with the tide on the broader issue of sovereign debt,” he said. He also made it clear that Britain would not back proposals for a 6 percent increase in the European Union’s budget.

“I put to Ecofin there should be a cash freeze in the budget,” he said, adding that he had found several allies.

He is going to need as many as he can get in the months ahead as the bloc struggles with rebuilding its regulatory framework in the aftermath of the credit crunch.

Editing by Tim Pearce

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