European Union countries led by France and Germany plan to push through controversial new hedge fund regulations next week after turning down British pleas to defer a vote in Brussels. The refusal by Paris and Berlin to delay a decision on the new rules, which are opposed by the UK, has set up a bruising early confrontation with David Cameronâs new government. British diplomats tried on Wednesday to persuade Paris and Berlin that Mr Cameronâs coalition needed more time to prepare for Tuesdayâs meeting of EU finance ministers. But Nicolas Sarkozy, French president, and Angela Merkel, German chancellor, are determined to settle a new regulatory framework on hedge funds and the private equity sector, which they claim were partly to blame for the financial crash. Elena Salgado, finance minister of Spain, which holds the rotating EU presidency, said other finance ministers would not agree to a further delay. âWe have a sufficient qualified majority,â Ms Salgado said in an interview with the Financial Times. âThere is a very clear majority of countries that want to approve it. After that, there still has to be the dialogue with the [European] parliament . . . [But] our intention is to approve it.â A senior German official said: âWe want this put to a vote next week.â Britain looks certain to lose any vote and George Osborne, chancellor, could be forced to swallow plans requiring greater transparency from hedge funds and private equity groups. The measures are opposed in the City as being excessively onerous. London is Europeâs main private equity centre and home to 80 per cent of its hedge fund industry. The directive has also caused concern in the US. In March, Tim Geithner, US Treasury secretary, wrote to EU officials warning that, if unchanged, the new regulations could trigger a transatlantic rift by unfairly locking US funds out of European markets. âThe Americans are going absolutely ape,â said a person involved in the negotiations. âThereâs this overwhelming belief now in Europe that if we legislate first, then the US will follow what we do.â Under the new rules, hedge fund managers and private equity firms could be forced to curtail the amount of leverage they use, make regular disclosures about their portfolios and would be forced to hold their assets with European banks. Non-EU hedge funds could face similarly exacting requirements if they wish to market themselves to EU investors. Managers and investors have said the proposed changes could force much of the industry from Europe. The proposed directive is a poison pill left by Gordon Brown, the former prime minister, who persuaded the Spanish presidency to delay a vote until after the May 6 election. The issue will be an early test of relations between Mr Cameronâs government and the rest of the EU. The Conservative leader has insisted he does not want a fight with the EU in spite of his partyâs eurosceptic stance, but he is regarded with suspicion by Mr Sarkozy and Ms Merkel. Officials in Paris say that Mr Sarkozy wants to press ahead with a vote on Tuesday in a display of Franco-German co-operation. Berlin and Paris want the EU to tighten up financial market regulation and clamp down on speculators. Mr Osborne is seeking to salvage what he can from the directive. But his spokesman said it was already âa long way down the trackâ. http://www.ft.com/cms/s/0/f583a770-5ed4-11df-af86-00144feab49a.html Bye, bye Britain. Welcome Switzerland and Asia !