Brussels, 01/10/2014 (Agence Europe) - The performance of the commissioner-designate for financial stability and the capital markets union was marked by prudence, on Wednesday 1 October.
British Conservative Jonathan Hill, who was able to admit that he is not an expert on some of the dossiers, deflect a number of tricky questions (banks which are “too big to fail”) and decline to give his position on questions not in his portfolio (euro-bonds, the FTT), got through on the strength of his strong common sense and ability to forge a consensus, on occasion showing his uniquely British sense of humour, whilst also proving that he was able to face the attacks he came under several times with firmness and promising to act in full transparency towards the European Parliament. “I am someone who acts, not an orator”, he concluded.
Hill started off by reassuring the MEPs that his nationality will not be a hindrance to the exercise of his functions. “I want Britain to be part of the successful European Union”, he started by saying. In response to Sven Giegold (Greens/EFA, Germany), who cast doubt on his commitment to Europe, he said that he would work for the general interest, not to defend the interests of the City. He went on to say that there was no conflict of interest in pledging allegiance both to the British Queen and the European Union, in response to eurosceptic MEP Steven Woolfe (EFDD, UK). As for his heritage, he reminded Kay Swinburne (ECR, UK) that he had sold the shares he owned in Quiller Consultants, a company he set up in 1998, as soon as he became commissioner-designate (see EUROPE 11161). On occasion, Hill showed great firmness as he repudiated the “caricature” which some MEPs, among them Marco Zanni (EFDD, Italy) and Bernard Monot (unaffiliated, France) tried to make of him.
Financial legislation: implementing what already exists
Paying tribute to the energetic work of the outgoing commissioner, Michel Barnier, who will have tabled some 40 legislative texts, Hill expressed his hopes of building on the “extraordinary” results of his predecessor to repair the financial system following the 2008 crisis. “We are all agreed there can be no going back to pre-crisis days. No going back to the wild risk-taking with its terrible toll on the jobs and living standards of so many of our citizens. No going back to our banks having to be rescued on the back of tax payers”, he stressed.
The commissioner-designate several times stressed the importance of having financial markets which are both solid and properly regulated, declining to accept the “false choice” between regulation and growth. Some of these comments earned him the applause of the assembly.
What is now the priority, said Hill, is to enforce the rules already adopted under the previous legislative period. “This will be an enormous task”, he said. Nearly 400 implementing measures will have to be adopted in order to implement the legislative packages to revise the financial instrument markets (MiFID II), banking prudential requirements (CRD IV) assurance requirements (Solvency II) and derivatives (EMIR). In this area, “I will follow the Community method in adopting the delegated acts”, he promised Werner Langen (EPP, Germany).
As regards the financial rules, if the legislation adopted does not achieve the aim pursued, then we must stand ready to make changes, if this proves necessary, Hill observed. Furthermore, he expressed his desire of completing controversial projects already on the table of the European legislator, aiming to create frameworks for the monetary fund markets, the management of stock market indices and to reform the structure of the banking sector.
On the last of these proposals, a controversial one put forward by Sampo Terho (ECR, Finland), the current minister for relations with the House of Lords approved of the balance sought by Barnier, without calling universal banking into question. Some say that the text goes too far, others that it does not go far enough, he observed somewhat evasively.
Banking union. Seeking to reassure the MEPs, Hill put banking union at the heart of his priorities, in that the correct functioning of this area - which consists of transferring banking supervision and resolution responsibilities to the European level - is in the interests of the member states, partly because it involves the application of a single rulebook throughout the EU.
“Yes, I come from a country outside the banking union, but the crisis has highlighted how interdependent the 28 member states are”, he said. He feels that his job will be to “put the remaining pieces of the jigsaw in place and make sure that it delivers the stability in our banking system that we all want to see”. He did not play down the “tension” in this field, particularly with countries outside the eurozone which will remain outside banking union, but we must “work together to reconcile these tensions”.
“Will you table the third pillar of banking union, the single deposit guarantee regime, before the end of 2015?” asked Elisa Ferreira (S&D, Portugal) and Philippe De Backer (ALDE, Belgium). Acknowledging that the subject is a matter of heated debate, Hill nonetheless added that his priority would first of all be to implement the revision of the current directive, as he does not wish to commit from the outset to launching a specific initiative.
Capital markets union. In line with the roadmap submitted to him by the new president of the European Commission, Jean-Claude Juncker, the capital markets union will be a new addition to the portfolio of the future Ffinancial services commissioner. “This is a project for the Twenty-Eight”, he told Markus Ferber (EPP, Germany). He added: “The goal is clear: to help unlock the capital around Europe that is currently frozen and put it to work in support of Europe's businesses, particularly SMEs. We need to broaden away from our dependence on bank funding by encouraging the growth of new, alternative sources of finance”. Among the priority fields of action, he spoke of the rise of a market for “high-quality securitisation”, improving information on SME credit status and promoting long-term investment funds. As regards the timetable for this new area, he referred to the deadline of 2019 laid down by Juncker, but added that some of these subjects, such as securitisation, would be dealt with very quickly, in 2015.
Banking bonuses. What everybody wanted to hear was what the Briton had to say about banking bonuses, the capping of which has been challenged by the United Kingdom at the Court of Justice of the EU. The legislation which has been adopted must be applied, said Hill. Is this his personal belief or a required response? He stressed that he did not “personally” support the action taken by his country. Whatever happens, it will be the responsibility of his colleague in charge of justice to ensure that European legislation is complied with, the British Conservative observed.
Finally, Hill expressed his approval of Juncker's idea to arrange the future European Commission into teams, the composition of which will vary depending on the projects to be carried out. This breaking with the current silo approach is “a good idea”, he said. He did not go so far as to advance a more specific division of his responsibilities with his future potential colleagues, whilst showing that he was familiar with the exchange between Juncker and the competent parliamentary committee (see EUROPE 11166). (MB)