The Financial Times reported this morning that in a bid to secure the UK’s agreement to writing tighter rules on economic governance into the EU’s treaties, the European Commission and the UK government last year discussed swapping the portfolios held by Catherine Ashton, the EU’s foreign policy chief, and Michel Barnier, the European commissioner for the internal market and services.
This information, which is attributed to senior unnamed officials, says that talks were held between the teams of UK Prime Minister David Cameron and José Manuel Barroso, the European Commission’s president, but was not discussed directly between the two men. The possibility was “informally raised” with Ashton – an assertion that her team denies. The role, if any, of the French government in discussions about moving Barnier, France’s commissioner, is not discussed.
No reason is given for the collapse of the discussions is given, though the article states that “some UK officials concluded that it would have amounted only to a temporary reprieve” for the City of London. In the end, Cameron refused to sign up to changing the EU’s treaties because other national leaders rejected his demands for safeguards for the UK’s financial-services industry.
The discussions on swapping the foreign policy and single market portfolios primarily reflect fears that the UK would veto the incorporation of economic-governance rules into the EU treaties. When the UK used its veto in December 25 other countries were forced to agree a distinct inter-governmental agreement. This left the UK isolated and has fuelled debate about the emergence of a multispeed Europe.
The logic for the swap is superficially strong. Ashton came to her role with no experience of foreign policy. Barnier is a former foreign minister of France and continues to have a deep interest in foreign policy. The French have been disappointed with Ashton’s performance. UK diplomats said in 2009 when portfolios were being distributed that the UK should aim for an important economic portfolio. The Conservatives, who have been in power since May 2010, have repeatedly accused the Commission of putting forward proposals that damage the interests of the City of London.
But the difficulties of the swap are just as evident. It would have undermined both commissioners. If Cameron was tempted by the deal, thinking that putting Ashton in charge of the internal market would secure more favourable treatment for the UK’s finance industry, he would soon have discovered that Ashton would have been suspected by other commissioners of seeking to protect the City of London. Moving Barnier to the foreign-policy post might have fed a widespread belief that the French government has undermined Ashton during her tenure.
As it is, the revelations undermine both commissioners. It underlines that there is widespread dissatisfaction with Ashton. And it also highlights the belief held by the UK – the biggest financial centre in the EU – that Barnier’s department has failed to consider the UK’s interests adequately.
For the Financial Times, the episode also re-opens the question whether Cameron’s predecessor, Gordon Brown, was wrong not to insist on Britain holding the internal-market portfolio. “Failing to secure that post for a Brit was probably the biggest single error in European policy for a decade,” said one UK Treasury insider is quoted as saying.
That is an argument whose merits partly depend on perceptions of who has the greatest influence on formulating policy: the commissioner, his deputy or established senior experts. Brown agreed to accept Barnier having responsibility for financial services on condition that Jonathan Faull, a British Commission official who was then director-general of the department for justice, liberty and security, moved to become director-general of the internal-market department. He believed this would ensure that financial-services legislation would not penalise the UK’s financial sector. However, that decision displaced another senior British official who had already earned high respect for his expertise on the financial sector, David Wright. Wright was the deputy director-general for financial services, and Commission rules prevent a director-general and deputy director-general being from the same nationality. By the same rationale, installing Ashton as internal-market commissioner in December would have forced Faull out, with already gone.
In the space of two and a half years, Britain would therefore have lost two senior respected Commission officials. It would have gained a commissioner, but there is little reason to believe Ashton would have been suitable for this job. It suggests a plan dreamt up in foreign, rather than finance, ministries by officials with little understanding of how the Commission works.
In any case, such a focus on the nationality of senior Commission officials ignores other influences on policymaking. Nominally, at least, the work of Commission officials is not guided by national affiliation. Secondly, draft legislation is agreed by the Commission as a whole and reflects broad political support in the Commission for tougher regulation of the financial services industry. Thirdly, legislation needs the approval of the EU’s member states and of the European Parliament.
Securing legislation that is to a particular government’s liking is not simply a matter of the nationality of Commission officials. It requires convincing the entire college of commissioners, not just one – and it requires a country to build alliances with other countries and political groups.
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