France’s Barnier expected to get EU financial services post -envoys
By Julien Toyer and John O’Donnell
BRUSSELS, Nov 20 (Reuters) – A former French foreign minister is expected to take charge of financial services in the European Union, diplomats said, a move that would unsettle bankers worried he may take a hard line with the industry.
EU diplomats said a deal to install Britain’s Catherine Ashton as the bloc’s foreign affairs chief foresaw Frenchman Michel Barnier becoming its commissioner for internal markets, a powerful role that covers financial services.The job carries significant influence in the aftermath of the global economic crisis as the commissioner will broker agreements on tough new rules that span banker pay to restricting investment banking.
“It is practically done — 99 percent,” one diplomat told Reuters, playing down rumours that financial services would be removed from the internal market portfolio in the Commission, the 27-country bloc’s executive arm.
“It is part of the deal,” a second diplomat said. “Now that the British have secured the nomination of Ashton, one could logically think that they won’t block the internal market portfolio going to Michel Barnier.”
A spokesman for the Commission denied a deal had been concluded and said its president, Jose Manuel Barroso, had not yet agreed the line-up.
“There is no deal. President Barroso has made no final decision yet on the make-up of the new Commission,” he said. “He is awaiting the final nominations and once this has happened he will discuss portfolios in the coming week.”
The Commission has much leeway to set the financial services agenda and is responsible for drafting new laws.
France, which led a drive to clamp down on banker bonuses, is seen by many as being in favour of regulating the industry.
The appointment of the former French foreign and agriculture minister would receive a cool welcome in Europe’s financial capital, London, where many believe a Paris-driven agenda lies behind strict rules proposed for hedge funds and others.
“There has been a strategy from (French President) Nicolas Sarkozy even before his election when he went to London in January 2007 and said: ‘French expatriates, you have to come back to Paris because we want to make a strong financial centre in Paris’,” said Karel Lannoo, chief executive of the Centre for European Policy Studies, a Brussels think-tank.
Lannoo said France was likely to push for a single rulebook for banks and others “which could be to the benefit of Paris”.
Others played down the significance of the Frenchman, who has already worked as an EU commissioner, taking the post.
“I think we are fairly resigned to the fact that it will go to Club Med (a Mediterranean country) this time,” said a senior figure in the City of London, the centre of financial services in Britain.
“The French approach is more interventionist and probably more regulation. But frankly, we would be going that way anyway.”
The EU is in the throes of a regulatory overhaul of the way banks and others work. The Commission has drawn up rules including ones that will require banks to hoard more capital, restricting their power to lend. A further wave of rules will shake up trading and exchanges.
(Additional reporting by Darren Ennis and Niclas Mika, editing by Jon Boyle) ((+32 2 287 6817 or +32 473 92 48 90; email@example.com))