BRITAIN has reacted frostily to the naming of Michel Barnier, the former French foreign minister and scourge of the City of London, as the European Commission’s chief Brexit negotiator.
The surprise nomination places an architect of Europe’s post-crisis financial regulation at the helm of the technical talks for Britain to leave the EU. Jean-Claude Juncker, the commission president, said he wanted an “experienced politician for this difficult job”.
The UK government’s cool response to the decision reflected heightened concerns that the commission will be an awkward negotiating partner. An official statement did not mention the Frenchman by name and was drafted to suggest the commission was the least important of three interlocutors in the Brexit talks.
“We look forward to working with representatives from the member states, the council and the commission to ensure an orderly departure of the UK from the EU,” a UK spokesman said.
Some City financiers were even more scathing about the appointment. One chairman said: “My initial reaction was ‘Oh, God.’ It’s clearly provocative.”
“I can’t see how it could be worse,” said another senior banking industry figure, who has worked in Brussels. “It’s incredibly provocative. This is Juncker’s revenge on Britain.”
Mr Barnier has always insisted he went to great lengths to avoid alienating Britain or the City when he was the EU’s single market commissioner from 2009 to 2014. But his interventionist instincts and Gaullist style at times made him the nemesis of the UK Treasury. Britain was outvoted for the first time on a big EU financial services law in 2013 when it objected to a revamp of bank capital rules.
While the leaders of Germany, France and other EU member states are determined to maintain a grip on the course of Brexit negotiations, the commission’s technical expertise will be invaluable during the complex talks. The precise balance of responsibilities in the negotiations has yet to be set.
Mr Barnier will oversee a commission task force rather than a department, and be advised by the officials most relevant to the Brexit talks. His role will be to prepare for formal exit talks under Article 50 of the EU treaty and conduct negotiations once the process is triggered. He will report to Mr Juncker.
His experience spans the range of European politics: he was France’s minister of agriculture and then foreign affairs as well as a member of the European Parliament. He also served two stints as an EU commissioner, covering regional policy spending and then the single market amid a torrent of post-crisis financial regulation.
Mr Barnier issued 40-odd proposals on financial services that rewrote Europe’s rule book for banks, markets and insurance, as well as building a banking union for the eurozone. Although many in London remember him for imposing a cap on banker bonuses, this was an idea born in the European Parliament that Mr Barnier later championed.
In a valedictory interview as EU commissioner with the Financial Times, Mr Barnier spoke of ‘unfair and unjust’ headlines at the time of his appointment that described him as the ‘most dangerous man in Europe’.
Towards the end of his five-year term in 2014, Mr Barnier’s relations with London were on a more even keel — looking back, he recalled ‘good spirited’ tussles with George Osborne, then chancellor.
But Nick Clegg, the former deputy prime minister, said Mr Barnier was “no friend of the City of London” and that “alarm bells will be ringing”.
Theresa May, prime minister, said yesterday she had an open mind about Britain’s future ties with the EU, adding that the UK might not copy any of the existing relationships between non-EU countries and the bloc.
“I’m looking at this with an open mind,” Mrs May said. “I think we should be developing the model that suits the United Kingdom and the European Union, not adopting, necessarily, a model that is on the shelf already,” she added in Rome after meeting Italian Prime Minister Matteo Renzi.
Additional reporting by George Parker
Published in Dawn, Business & Finance weekly, August 1st, 2016