Barnier brings record of dealmaking over ideology to Brexit talks
27 July 2016. By John Rega.
At the end of his term at the European Commission two years ago, Michel Barnier said he would seek a new office where he could “be useful.”
Now Jean-Claude Juncker — who beat Barnier for their party’s nomination as commission president — is making a fitting use of the Frenchman as the EU’s negotiator on the UK’s exit from the union.
That role will seat Barnier, 65, across the table from senior British figures in what promise to be tough negotiations on the future of trade and other ties across the English Channel.
Despite his reputation for being an ardent EU advocate, Barnier will bring a preference for dealmaking over ideology to the talks. His legislative record has displayed flexibility, political savvy and a readiness to accept compromises. More often than not, the UK backed the bills he put forward.
Juncker’s appointment of Barnier today is reminiscent of when the former French minister — sidelined in Paris for being too pro-European — was put in charge of EU financial-services policy in 2010. Barnier was championed as the man to reverse the free-market ideology that allowed for “light touch” oversight of the City of London, where excessive lending, derivatives dealing and other risk-taking helped fuel the financial crisis.
Barnier’s public response to the referendum has been to call for closer unity within the rest of the EU. In the aftermath on June 24, he tweeted that the UK had freely chosen solitude over solidarity.
But to understand how he may approach Brexit talks, consider the record from his half decade as the EU’s financial-services chief.
Barnier pushed through stiffer capital standards for banks and greater safeguards for derivatives markets. He also expanded market disclosures and regulation in other crucial areas of the financial system, such as money markets.
At times, he offered some tough rhetoric about curbing financiers. Yet his agenda was inherited almost wholesale from the Group of 20 leading economic powers, where the UK was one of the leading voices. His mantra was to carry out the G-20 priorities “without improvisation” and to build up reforms “brick by brick.”
Barnier pressed his case not on a call for punishing bankers, but on a need for international regulatory cooperation and European harmonization. One of his favorite English phrases appeared to be “the single rulebook,” an idea that British officials also cheered, to ensure equal rigor around the bloc.
From the start, he showed a willingness to court the UK. He made London his first official visit after taking office — and surprised an audience of bankers with remarks in English.
Barnier later made a point of noting that the UK voted in favor of his financial bills — until the streak was broken with a law to curb short selling, which empowers an EU agency to overrule local authorities in some circumstances. Even then, the initiative stemmed from a desire to align European rules with Britain’s.
The UK lost a court challenge to that law as well as its appeal against an EU cap on bankers’ bonuses, Britain’s other legislative loss during the Barnier regime.
Barnier embraced the populist cap when it arose in debate, to be sure. But the bonus curb was a European Parliament amendment, not his original proposal, and he backed it partly to keep the lawmakers on board for a deal to institute global banking standards in EU law.
The UK government had criticized Barnier’s first draft of the banking bill, on different grounds: It gave the country too little freedom to top up the capital requirements, London said. It was hardly a debate about imposing overregulation from Brussels.
While Barnier raised British hackles with proposals on credit-rating services and auditors, he was also quick to accept compromises that scaled back contentious points such as mandatory rotation for firms.
Barnier showed flexibility in other debates, such as the eurozone resolution fund for cleaning up bank failures.
Germany insisted in creating it as a side agreement among governments. Sidestepping EU legislation must have privately irked the committed European integrationist, but Barnier accepted the result rather than holding out for a great leap.
Describing himself as “a political man” rather than technocrat, Barnier developed a deal-making style based on personal meetings, not swapping papers. He attended final-stage negotiations to spur deals overs bills. He quelled a parliament revolt against a technical rule mainly by sitting down with members, and stating a pledge to address the problem later.
The Brexit talks are for higher stakes, of course.
Given Barnier’s style, British counterparts should look forward to some Eurostar diplomacy from the politician who prizes personal contacts. They should at least get an ample hearing of their arguments.
As the recent internal-market commissioner, Barnier should need no convincing that the UK’s financial rules are at least as tough as EU standards, which should allow them market access on the basis of “equivalence.”
As a self-described Gaullist, who sees the EU as a federation and not a super-state, Barnier will understand British attachment to sovereignty.
He’s a politician who clearly relishes his time on the dais — preferably for announcing deals, not grandstanding.
At the same time, Barnier argues for a stronger EU in economic as well as defense and security policy, on which he has been an adviser to Juncker. He will be on guard against any arrangement seen as weakening the remaining bloc of 27 countries.
Both sides will face enormous public pressure to pursue their interests. They’re working toward an irrevocable result, not EU legislation, which can be fudged with a bit of obfuscation and a review clause.
Barnier nonetheless brings a hard-earned trust with some London insiders, alongside Brussels credibility as a two-term commissioner. He may well end up being even more useful than he had hoped.