DAVID Cameron, the UK's new prime minister, will visit Nicolas Sarkozy and Angela Merkel in Paris and Berlin later this week, as the coalition government reaches out to EU leaders who have criticised the Conservatives' Euroscepticism in recent years. In his first overseas trip as prime minister, Cameron will have dinner with Sarkozy at the Élysée palace on Thursday night before flying to Berlin for talks with Merkel, who showed her dismay at Cameron's approach to the EU by snubbing him on a recent visit to London.

The French president and German chancellor, who have criticised Cameron's decision last year to abandon the main centre-right grouping in the European parliament, last week invited the prime minister to visit their respective capitals.

The newly co-operative Tory (Conservative party) approach to the EU was on display on Tuesday when George Osborne, the British chancellor (finance minister), attended his first meeting of EU finance ministers (Ecofin) in Brussels. Osborne said the government would adopt a “new constructive, engaged approach”.

The chancellor, who was applauded by his 26 fellow EU finance ministers at the start of the session, faced a difficult meeting because the main item was a draft directive requiring greater transparency from hedge funds and private equity groups. As home to 80 per cent of Europe's hedge funds, Britain sees this as hostile to the City — London's financial district. Osborne has decided it is too late to stage a fight because he believes he has been given a 'hospital pass' by Labour on the directive.

Gordon Brown, the previous prime minister, arranged, with the socialist Spanish government, which holds the EU's rotating presidency, to delay the matter until after the general election.

But the chancellor hopes that a key British demand — that hedge fund managers should be free to work across the EU's single market without having to seek the approval of the authorities in all 27 member states — would be considered. The European parliament voted in favour of this on Tuesday.

The hedge fund draft directive will now enter a 'trilogue' involving the EU's three main institutions — the council of ministers, the European parliament and the European commission. The treasury hopes that during these negotiations the single market proposal will be agreed. Britain has no veto because the draft directive is decided in the council of ministers by qualified majority voting.

Osborne said “I arrived (in Brussels) with a challenging position bequeathed to me by the previous government, where there was not much support or recognition of British concerns.

“I am very pleased that the minutes (of the meeting) reflect my concerns. We now take the process forward. There is still much to play for.”

— The Guardian, London