Ebullient was the mood in London upon the announcement of the incoming European Commission on September 10th. Britain’s European Commission nominee, Jonathan Hill, was given the freshly created Financial Stability, Financial Services and Capital Markets Union portfolio by new Commission President Jean-Claude Juncker. The recently retired Leader of the House of Lords, Lord Hill was noteworthy in his nomination for his obscurity, particularly at European level. This lack of notoriety in Brussels seemed to have been no obstacle to Britain’s new Commissioner securing a sizeable economic portfolio.
Subject to the European Parliament’s confirmation of the next Commission as a whole, Lord Hill will have responsibility for financial services, an area of great significance to the UK. Britain’s new portfolio was a surprise to most – including this author – and it demonstrates both Mr Juncker’s political acumen and the general desire in Europe to accommodate UK interests. It’s difficult to think of a portfolio which better captures the country’s core EU concerns.
Britain should keep this willingness to compromise in mind throughout any redefinition of its relationship with the European Union. Despite the cries of political success, Lord Hill will not represent the UK and instead will act in the common European interest, but he will bring a Westminster perspective to Brussels. Indeed, for all the celebrations of Britain’s ‘victory’, it’s important to consider how this portfolio may not be entirely as attractive as it seems at first glance.
1. New Commission structures
The Financial Services Commissioner might be limited in the exercise of powers by the refashioning of the Commission’s hierarchy as proposed by President-elect Juncker. A variation on the theme of clusterisation, the creation of an array of Vice Presidents with coordinating functions for groups of Commissioners could restrict Lord Hill’s capacity to act independently. In contrast to the substantial room for manoeuvre enjoyed by current Internal Market Commissioner Michel Barnier (whose role incorporates financial services), Britain’s Commissioner may well find his proposals ‘filtered out’ by the Vice Presidents. Conflicts between Commissioners within clusters could also arise. For now much remains unclear as to how these new structures will work in practice. As a consequence, although the portfolio is significant, the ability to achieve objectives could be reduced.
2. The City does not the UK make
Standing up for the City isn’t usually a vote-winner at home. While helping any British industry triumph over international ‘interference’ may gather some pubic support, it’s important to remember that people care about much more than financial services. A revitalised EU would bring economic benefits to the UK, with Britain’s Commissioner hopefully playing a leading role – but this contribution would have been more visible through other portfolios. Boosting EU financial services is certainly not as high-profile as successfully concluding a trade agreement (eg TTIP) or getting rid of single market red tape. This is not to say the Commission won’t deliver on its promises, but it may make it more difficult for the British public to see the UK make its voice heard in the EU and get positive results from it.
3. An unknown personality
Personality can count for a lot in the Commission. It is an organisation defined by cooperation and consensus building, and gathering the necessary support for policy initiatives requires a high degree of finesse. In this respect, political fame and name recognition can be extremely useful. The ability to compromise is equally a fundamental component to a successful Commission tenure. We know extraordinarily little about Lord Hill, so we must wait and see whether his political expertise in the UK can be suitably adapted to the demands of European politics. His success in doing so may well define his time in the Commission.
4. Not worse instead of better
It’s evident that Jean-Claude Juncker offered Britain the financial services portfolio as reconciliation and an olive branch. Nevertheless, on balance, it has the potential to send the wrong message to the British public. Giving the UK this role plays into a narrative of preventing the EU from getting worse instead of making it better. It runs that: with a Briton in change of EU financial services policy and the capital markets union, the UK can be assured that Brussels won’t unnecessarily intrude on a core national interest. However, the most convincing reason for remaining within the European Union is evidence that it is being improved, rather than simply not getting worse. This signal would have been a much stronger had Britain been offered the Trade or Internal Market portfolios.
This is not to prejudge Lord Hill or the Juncker Commission. It would be very helpful to the case for EU membership if both succeed in making the Union more focussed, clearer and effective. In terms of Britain’s long-terms interests, managing the institutional disparities between euro and non-euro Member States will be essential, and financial services will be an important element. All the same, the task of convincing ordinary people in Britain that the EU works for them has not been made easier with the UK’s new Commission portfolio.
Shortened link: britainseurope.uk/20140926
How to cite this article:
Salamone, A (2014) ‘The UK’s new Commission portfolio: Making the EU not worse instead of better’, Britain’s Europe (Ideas on Europe), 26 September 2014, britainseurope.uk/20140926