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Britain handed financial services portfolio in European commission
Britain handed financial services portfolio in European commission
(about 9 hours later)
Britain has been given the influential financial services portfolio in the European commission. In a surprise move by the president of the EU executive, Jean-Claude Juncker, the previously little-known Conservative peer Lord Hill of Oareford was named the new commissioner for financial stability and regulation.
Britain has been given the influential financial services portfolio in the European commission in what will be seen as a coup for David Cameron.
Securing the plum if problematic post is likely to be seen as a coup for Cameron, who had demanded that Britain be awarded a key economic portfolio in the new Juncker team. Hill will replace Catherine Ashton as the UK's commissioner.
In a surprise move by the president of the EU executive, Jean-Claude Juncker, the previously little-known Conservative peer Lord Hill of Oareford was named the new commissioner for financial stability and regulation.
There were fears within the UK government that Juncker would punish David Cameron with a lesser role for Britain. The prime minister strongly opposed Juncker's appointment to the top Brussels job.
There were fears within the UK government of a lesser role for the British candidate, as a punishment for Cameron's strong opposition to Juncker's appointment to the top Brussels job. Juncker had also indicated he wanted the UK to put forward a woman to be its commissioner. It was reported that he had to Google Hill – a former adviser to John Major, lobbyist and education minister – to find out who he was after Cameron proposed him.
Juncker had also indicated he wanted the UK to put forward a woman for the job and it was reported that he had to Google Hill – a former PR man and education minister – to find out who he was after Cameron proposed him.
However, Juncker appears to have buried the hatchet by giving such a coveted role to the UK, which has battled to protect the interests of financial services in the City of London during the regulatory crackdown following the banking crisis.
However, Juncker appears to have buried the hatchet by giving such a coveted role to the UK, which has battled to protect the interests of financial services in the City of London during the regulatory crackdown following the banking crisis.
But the Hill appointment is certain to run into opposition during the commissioner's hearing next month in the European parliament. The appointment will also put the onus on the UK to be seen to be regulating the City in the European and not the national interest, making the government the target of sniping from Ukip. The Ukip leader, Nigel Farage, said: "What a coup for Juncker – he has got an Englishman to be hangman for the British financial industry."
Cameron and Osborne were quick to welcome the appointment, but it is certain to run into opposition during a commissioner's hearing next month in the European parliament.
Hill said: "Juncker has given me a great responsibility in asking me to take on the financial stability, financial services and capital markets union portfolio, a sector of fundamental importance to the European economy. I am very much looking forward to working in his team. There is much work to do to build on the important legacy to ensure we have stable and well regulated financial markets … I look forward to playing my part in building a stronger Europe."
Hill will have to ensure he is perceived as regulating financial services in the collective European interest and without showing any favouritism towards the City of London.
As reported initially in The Guardian on Tuesday, the Juncker commission marks a radical departure from its predecessor, with the creation of seven vice-presidents, three of them women, and four of them without a specific portfolio but given wide ranging powers over strategy and key policy areas. The executive is more overtly political than its predecessor, containing nine ex-prime ministers or deputy prime ministers.
The tricky position this puts him in was highlighted by the Ukip leader, Nigel Farage, who said: "What a coup for Juncker – he has got an Englishman to be hangman for the British financial industry."
Chancellor George Osborne said the announcement was great news for Britain. "Look forward to working with Lord Hill, EU financial services commissioner, to build safer & more competitive sector. Great news for UK," he tweeted.
Hill said he was grateful that Juncker had given him a great responsibility in asking him to take on a sector of fundamental importance to the European economy.
The prime minister's official spokesman suggested the appointment was good news for Cameron's hopes of achieving reforms in Britain's relationship with the EU.
"I am very much looking forward to working in his team. There is much work to do to build on the important legacy to ensure we have stable and well regulated financial markets … I look forward to playing my part in building a stronger Europe."
"You are seeing that [financial services] being led by a commissioner from a euro-out member state, I think speaks to the point that the prime minister and others have been making about the importance, as we go ahead with reforms, of ensuring that the voice of those [non-euro] member states in areas such as the single market are fully represented. Financial services is a very significant sector in the UK, not just in London," he said.
The chancellor, George Osborne, said the announcement was great news for Britain, while the prime minister's official spokesman suggested it was a positive sign for Cameron's hopes of achieving reforms in Britain's relationship with Brussels. Awarding the financial regulation brief to Britain, while unexpected, conforms to a pattern Juncker has laid down in his distribution of jobs – handing responsibility for policy areas to countries who regularly complain about policy shortcomings in those very areas.
Awarding the financial regulation brief to Britain, while unexpected, conforms to a pattern Juncker has laid down in his distribution of jobs – handing responsibility for policy areas to countries who regularly complain about policy shortcomings in those very areas.
Britain, for example, is regularly at odds with Brussels over financial regulation and is worried that the interests of the EU's biggest financial services sector will lose out under pressure from the euro single currency zone.
Britain, for example, is regularly at odds with Brussels over financial regulation and is worried that the interests of the EU's biggest financial services sector will lose out under pressure from the euro single currency zone. Juncker is effectively telling Britain to stop complaining and do something about it.
Rather than seeking to change EU policy, Hill will be under pressure to oversee financial markets impartially. An early test will be how he deals with bankers' bonuses. The EU has decreed curbs on the bonuses and Brussels is enraged that London-based banks appear to be sidestepping the new rules with ease. Hill will be under pressure to enforce the new rules.
Rather than seeking to change EU policy, Hill will now be under pressure to oversee financial markets impartially. An early test will be how he deals with bankers' bonuses. The EU has decreed curbs on bankers' bonuses and Brussels is enraged that London-based banks appear to be sidestepping the new rules with ease. Hill will be under pressure to enforce the new rules.
UK business groups were cheered by Hill's appointment. The chief executive of manufacturers' organisation EEF, Terry Scuoler, said the portfolio gave Lord Hill a chance "punch above its weight … in an area of policy which is of critical importance for the UK economy".
Immigration across the Mediterranean is one of Greece's biggest issues with the EU. Juncker put Greece in charge of migration policy, challenging Athens to do something about it.
The CBI, a lobbying group for leading companies, said it hoped Hill would use his key role at Europe's top table to "complete the single market, get an EU-US trade deal over the line and pull back where the EU does not add value".
The Dutch foreign minister, Frans Timmermans, was appointed Juncker's deputy and first vice-president and also charged with ensuring that subsidiarity is practised in the EU, meaning that decisions be devolved to the national level when possible and not passed up the ladder to Brussels. The failures of subsidiarity are also one of Holland's biggest bugbears with the EU and Juncker has given the Dutch the task of fixing it.
However, Labour said the new commissioner still had to rebuild many alliances broken by Cameron in Europe. The shadow minister for Europe, Gareth Thomas, said: "The key test for David Cameron remains whether he can ensure that Britain plays a leading role in pushing an agenda for change and reform within the new European commission."
The biggest challenge may fall to Pierre Moscovici, the former French finance minister who was put in charge of economic and monetary affairs, a crucial position that polices national budgets and oversees application of the euro rulebook. The appointment came on the day that Paris announced it would fail to meet the euro budget deficit rules for another three years. This puts Moscovici on the spot, a test of how the new commissioner will tackle the rule-breaking by his own country.
Hill was branded "Lord Who?" when Cameron plucked him from the Lords to represent Britain's interests in Europe but he has long been influential in the Conservative party – most prominently as an adviser to Sir John Major when the former prime minister was in No 10.
Germany's Günther Oettinger was given the digital economy brief. Berlin strongly opposed Moscovici's appointment because for Berlin, overseeing the euro rulebook is the most important work of the commission.
Cameron was expected to go for a big name candidate for the UK's nomination, but in the end, he appeared to plump for diplomacy and pragmatism over star quality. With experience almost entirely in lobbying and behind-the-scenes politics, the Cambridge-educated 54-year-old Hill is regarded as a trusted operator and party loyalist, who will work to deliver Cameron's aims of reform in Brussels.
But two fiscal hawks and German-style austerians, Valdis Dombrovskis and Jyrki Katainen, former Latvian and Finnish prime ministers, were made vice-presidents supervising the economic and financial policy areas, meaning that Moscovici's room for manoeuvre will be limited.
Having once replied "non, non, non" when asked whether he would want the job of EU commissioner, Hill had to greet the news of his nomination by denying that he was a "reluctant conscript".
UK Business groups were cheered by Hill's appointment. The chief executive of manufacturers' organisation EEF, Terry Scuoler, said the portfolio gave Lord Hill a chance "punch above its weight … in an area of policy which is of critical importance for the UK economy."
However, Labour said the new commissioner still had to rebuild many alliances that have been broken by Cameron in Europe. The shadow minister for Europe, Gareth Thomas, said: "The key test for David Cameron remains whether he can ensure that Britain plays a leading role in pushing an agenda for change and reform within the new European commission.
"The priority for the UK's newly appointed European commissioner in the months to come will be to start repairing broken alliances and building bridges with partners across the EU so that he can effectively speak up for Britain and push for reforms that Europe needs, and Britain wants.
"As the eurozone once again faces perilous times ahead, the European commission needs to be a vital partner for Britain in seeking to establish the most robust and effective mechanisms of dealing with the economic uncertainty yet to come."
