“The efficiency of the market must serve the citizen”

Completely unaccustomed sounds in Brussels from a man, who can look back on decades of experience, holding the highest political offices in France and in the European Union, and who is about to significantly correct the previous neoliberal political course of the European Commission. Michel Barnier runs for the office of European Commissioner for Internal Market and Services, one of the key resorts of the Barroso 2 Commission. His departments will decide what the future of the Internal Market and the financial market regulation will look like. Whether the Commission - as in the past - will support unleashed and uncontrolled market forces, or whether in the wake of the most serious financial and economic crisis in post war history, European policy will finally prevail that has the interests of Europe’s citizens in mind. Barnier made his political convictions absolutely clear and his appearance before the Economic Affairs and Internal Market Committee left no doubt that he will receive the broad support of the Parliament for his candidacy.

“I don’t want my name to be linked to social regression”

Demonstrating impressive political experience and diplomatic skills, Barnier mastered the three-hour question and answer game in the European Parliament brilliantly without making any gaffes. His choice of words indicated that he intends to clearly distance himself from his predecessors Bolkestein and McCreevy, who, with the so-called Bolkestein Directive and their one-sided commitment to the interests of the financial industry, had caused long-term harm to the reputation of the Commission in the eyes of citizens and workers. High time for a change of policy and Barnier demonstrated his will to achieve this by the formulations he used.

“Putting the focus on people again, putting the markets at the service of people”

Some relevant examples: “The Internal Market has to become fairer”, said Barnier. In future, its services with regard to new Draft proposals should for the first time also present social and ecological impact assessments, a request, which had long been made by the employees’ side. “The Internal Market can only work on the basis of solidarity”, continued Barnier. Territorial and social discrepancies had to be avoided; he would give a clear Yes to social and environmental progress clauses. With regard to public services, which for a long time had been exclusively treated under the aspect of competition by Barnier’s predecessors, the Frenchman indicated a more nuanced point of view. It needed to be clarified, what public services were. Barnier, however, was not yet prepared to answer the question whether this, as demanded by many, should be carried out within the scope of a so-called framework Directive or by sectoral Directives for individual areas: “I am not yet sure about this”. Barnier commented with regard to service concessions, that so far these had not been included in any text and that one had to think about whether a new Directive was really needed. What had to be considered in any case were the traditions of the Member States. It was his intention, said the Frenchman, to go to a European country once a week, to visit the regions and to listen to the people. Asked about a favourite game, according to which the Member States like to blame “Brussels” for their own decisions in the council for more deregulation and privatisation, Barnier showed European self-confidence: “In future, Brussels will not assume responsibility for actions taken by the Member States.”

“A safer world will be a fairer world.”

Barnier demonstrated his professional competence with regard to the many questions about the further action of the Commission concerning the regulation of the financial markets. The financial crisis was the most serious crisis since 1929 and without the intervention of the public sector, there wouldn’t be any banks today, said the Commissioner designate. The time had come to close the “Book of Irresponsibility”. Reforms were definitely necessary, no market, no product and no player should be able to dodge the rules. The reform of the banking supervision had to be improved, rules concerning bank solidarity, capital adequacy, derivatives and against the abuse of market power had to be introduced. Further key areas of work would be Solvency II, the European deposit guarantee, mortgage loans and the introduction of a Europe-wide bank card.

Europe as engine for the world: “It is the industry’s own responsibility if it decides to retreat because of rules”

Barnier countered a popular argument of the financial lobbyists to prevent new rules for the financial industry: Europe could not proceed on its own because otherwise the financial capital would move to other regions of the world. Here, Barnier came clearly out in favour of Europe taking a pioneering role and of a strong dialogue with the USA and China. His credo: “The European financial industry needs regulations to make it even more competitive.” Europe would need a legal framework and instruments enabling her to intervene when the next crisis beckons. “We cannot always chase after the crises”, said Barnier.

“95 percent of financial transactions escape any forms of control.”

Obviously the lobbyists of the City of London were also present during Barnier’s hearing. One British MEP commented that one “should not kill the goose that lays the golden eggs”. “Are you commenting on behalf of the City of London or the citizens?” was the humorous counter-question of the French politician, which was greeted with wide applause by the MEPs. The British taxpayers had to dig deep in their pockets to bail out the banks, said Barnier, who also quoted the “Father” of the Liberals, Adam Smith: “The market cannot function without rules and a sense of fair play.” The crisis had already destroyed hundreds of thousands of jobs and we haven’t seen the end of it yet, commented Barnier, rejecting to carry out “business as usual”. He did not oppose the introduction of a Financial Transaction Tax, but said: “I don’t want to venture out too far at this moment in time”.