It was a perfectly mastered performance signed by Commissioner-designate for Financial Services, Mairead McGuinness, on Friday 2 October, during her hearing to the European Parliament’s Committee on Economic and Monetary Affairs (ECON). She has made several commitments, including injecting “fresh energy” into the banking union.
After 16 years in the European Parliament, the former First Vice-President of the institution sees this change of post as a “new challenge”, but also as an asset for the European Parliament. “To have a parliamentarian, mindful of your role, should be a bonus”, she told her former colleagues.
Another advantage of her candidacy: if confirmed in this post, Ms McGuinness would make the ‘von der Leyen’ Commission a fully gender-equal Commission – something which several MEPs welcomed. She would also be the first woman to hold the financial services portfolio.
To carry out her mission, the Commissioner-designate intends to pursue the agenda set by her predecessor, Valdis Dombrovskis, while taking into account the fact that the context has fundamentally changed with the Covid-19 crisis.
One of her main priorities will be to ”inject fresh energy to complete banking union”, she promised, with the establishment of the European Deposit Insurance Scheme (EDIS) and the ‘backstop’ for the Single Resolution Fund (SRF), with this role to be performed by the European Stability Mechanism (ESM).
“In this house, I’ve never shied away from most difficult challenges and I will not shy away on building consensus on the banking union”, she assured the many MEPs who asked her for commitments on this issue.
Aware of the deadlock in the EU Council, Ms McGuinness was optimistic. “Covid-19 prepares us to make brave steps now”, she said.
She advocated first identifying areas where there is broad support and where progress can be made, even if all the elements are interrelated, she acknowledged. She wants “to have a very honest conversation with” the Member States and Parliament to see where the real fears lie. The problem, she said, is that trust between Member States is not what it should be, probably because of past banking crises.
In the short term, she said, the focus should be on finalising the reform of the ESM, “which is well advanced and ready for closure”. But Italy is having difficulty in taking the final step (see EUROPE 12558/1). The crisis management framework is also an area where she sees an opportunity to move forward. She also promises to intensify efforts on EDIS.
“In this house, when I take up a job, I finished it”, she reminded Members. With the support of the European Parliament, she is sure she will achieve results.
Asked about the implementation of the latest ‘Basel III’ reforms of the banking prudential rules, the Irish Christian Democrat committed herself, as in her answers to written questions (see EUROPE 12571/19), to carry them out faithfully, while taking into account the specific European characteristics and the impact of the Covid-19 crisis.
She also promised to pay close attention to the increase in non-performing loans due to the crisis, which would prevent banks from being able to continue to support the economic recovery.
Accelerating the Union of Capital Markets
The completion of the Banking Union must go hand in hand with the completion of the Capital Markets Union (CMU), McGuinness insisted, promising to work towards a “people-centred” CMU.
Acknowledging that this is a long-term project, in which progress has so far been made “step by step”, she felt that Brexit could perhaps accelerate its development.
“Whether there is an agreement or not, relations with the UK will be different”, she said on the subject, although she did not wish to comment in detail on future EU equivalence decisions in financial services.
Another major priority is sustainable finance. In this area, Ms McGuinness intends, among other things, to prepare the renewed strategy, speed up work on green bonds, eco-labels and improve the disclosure of non-financial data by companies.
The Commissioner-designate also supported the commitment of Commission President Ursula von der Leyen that 30% of the €750 billion European Recovery Plan will be raised through green bonds. She believes that it is essential to develop “quickly and carefully” a European framework for green obligations based on the EU taxonomy and providing for verification.
She did not want to make a promise to MEP Paul Tang (S&D, the Netherlands), who asked for a commitment from her on a proposal for a regulation setting up a social taxonomy, but she indicated her support for the idea.
She also supported the idea of a ‘brown list’ of investments with significant adverse environmental impacts, while emphasising her fear that this could become a “blacklist”.
“Zero tolerance” for money laundering
As a result of the ‘FinCEN files’ scandal (see EUROPE 12564/11), many questions have been asked about money laundering.
In this regard, the Commissioner-designate has committed to a policy of “zero tolerance” and called for strong supervision at European level, focusing on the riskiest activities.
Ms McGuinness stressed the need to assess what went wrong in the ‘Wirecard’ case (see EUROPE 12535/15), which she described as “a shocking case of supervisory failure”.
A regulation to harmonise money laundering provisions would bring more clarity, she acknowledged, adding that the directives could also sometimes work perfectly well.
She assured MEP Sven Giegold (Greens/EFA, Germany) that she would not hesitate to open infringement proceedings against Member States that violated EU law in this area.
On the creation of a European financial intelligence unit, on the other hand, she considered that a European supervisor would be more realistic to achieve the same results, already anticipating Member States’ objection to the establishment of a central unit.
The European interest before the interest of Ireland
During the hearing, a number of Members expressed concern about the fact that several high-ranking positions in the EU are in Irish hands, fearing that this will hamper the fight against tax dumping in Europe.
Claude Gruffat (Greens/EFA, France) highlighted the very unusual situation of having the ECB’s chief economist, the President of the Eurogroup and the Commissioner-designate for Financial Services, all of the same nationality.
Undaunted, the Commissioner-designate assured that there was “no conspiracy” and expressed her pride in seeing three Irish personalities in these positions.
The French Member also felt that there were legitimate reasons to question Ms McGuinness’ position on taxation, given some of her votes in the European Parliament in the past, particularly on the taxation of multinationals.
If confirmed in this post, she “will be a European Commissioner defending the European interest”, she replied, confirming that she will adopt a Community approach to taxation.
Beset with questions on taxation – although the dossier is not in her portfolio – the Irish Christian Democrat said she would generally support all Commission initiatives for fairer and more efficient taxation.
She assured MEPs that she supported the Financial Transaction Tax (FTT) and tax transparency on a country-by-country basis, an issue which she had supported in the European Parliament despite her country’s opposition in the EU Council, she recalled. She also recognised that the digital giants should, too, “pay their fair share of taxes”.
These answers probably satisfied the Greens/EFA and S&D groups, which are particularly attentive to these issues.
“After today’s hearing, we are convinced that she will act as a European Commissioner and that she is committed to the interests of the EU as a whole”, stated Jonás Fernández (S&D, Spain).
Green light from the coordinators
According to our information, the coordinators for the ECON Committee from the EPP, S&D, RE, Greens/EFA and ECR groups supported the nomination of Ms McGuinness. Absent at the meeting, the ID group has reportedly confirmed its agreement in writing, while the GUE/NGL group is against her appointment.
On the basis of the recommendation of the ECON Committee, the Conference of Committee Chairs will assess the results of the hearing and forward its conclusions to the Conference of Presidents of the European Parliament.
The Conference will be responsible for the final evaluation and will decide at its meeting on 6 October whether or not to conclude the hearing. If it decides to conclude it, then the plenary will vote on 7 October to approve or reject the appointment of the Commissioner-designate. (Original version in French by Marion Fontana)