Michel Barnier

Barnier, standing at right, may be in for another tussle with Germany's Wolfgang Schäuble.

With Brussels gearing up for tomorrow’s much-anticipated unveiling of the European Commission’s proposal for a new EU agency to take over responsibility for bailing out and restructuring failing banks, we thought it was as good a time as any to post the outline of the plan presented to commissioners last month.

As we reported in today’s dead-tree edition of the FT, the Commission’s legislative proposal that is to be agreed at Wednesday’s meeting of the college is not much different from the eight-page blueprint (read it here) presented by Michel Barnier, the commissioner in charge of financial regulations, and José Manuel Barroso, the commission president.

Fellow Brussels Blogger Alex Barker has written extensively about the outline both for the FT and the Brussels Blog, but it will serve as a good comparison to what comes out tomorrow since the German government has made clear it is unhappy with key elements of the original outline – particularly its contention that a “network of national resolution authorities and funds” is “not sufficient”. Read more

After months of deliberation and some not-so-private sparring with Berlin, the European Commission has pretty much anointed who it wants to be the all-powerful bank bailout and clean-up authority for Europe’s banking union: the European Commission.

This (somewhat predictable) conclusion to its internal policymaking journey is outlined in a paper, seen by the Financial Times, which was distributed to commissioners ahead of their weekly college debate on Wednesday.

There is no sign of Brussels bowing to pressure from Berlin. At the heart of the Commission’s proposed system is a powerful central authority, which has access to a single bailout fund and the clout to shut down a bank even against the wishes of its home state’s government. Brussels wants it operating by 2015.

What about those German concerns that this would breach the EU treaties? Michel Barnier, the EU commissioner responsible for financial issues, concedes in the paper that “only an EU institution” has the legal authority to take important decisions with European effect. Given there is no legal basis to give the European Central Bank this role, the Commission concludes that the only option is to anoint itself as the top resolution authority. Read more

George Osborne, the UK chancellor, surrounded at the marathon Brussels negotiations on bank capital rules. The May 2 talks ended at 2am with Osborne outnumbered 26-1 by other EU finance ministers. A deal was finally done on Tuesday.

 

In our interview published today with Michel Barnier, the silver-haired Frenchman who oversees the EU’s financial system, he talks in great depth about the future of banking regulation and his relationship with François Hollande.

EU commissioner Michel Barnier

EU commissioner Michel Barnier

For Barnier, the election back home not only brought him a new French president to deal with, but also a mixed legacy for his political home, the centre-right UMP. The party’s standard-bearer Nicolas Sarkozy used the waning days of the campaign to openly court voters who had supported the far-right National Front through anti-EU rhetoric.

In addition to threatening to pull France out of the EU’s passport-free Schengen travel zone, Sarkozy regularly belittled the European Commission and urged “buy French” policies that violated the EU’s common market.

In our hour-long interview, Barnier insisted that such Europe-bashing was only the result of overheated politics ahead of a contentious vote. “I think you have to put to one side the electoral campaign,” he said, citing UMP party luminaries like François Fillon and Alain Juppé who have strong pro-European pedigrees.

Still, Barnier said he intends to actively insert himself in the post-Sarkozy debate about the UMP’s future – though he assiduously declined to say what role him himself might play in that new party. Read more

European regulators embarked on a financial rulemaking binge after the 2008 crisis. Yet the biggest question of all — how do you let a big bank like Lehman Brothers collapse without endangering the entire financial system — remains unanswered. If you think the system was inadequate 2008, it is basically no better today.

A Brussels proposal on “Crisis Management and Bank Resolution” has been promised “in a few weeks” since the summer of 2011. Month after month, the Commission ducked the issue. Today Michel Barnier, the commissioner overseeing financial services, admitted he needed more time for a informal mini-consultation on “timing and calibration”. The odds are surely lengthening on a proposal emerging before the summer. Read more

Angela Merkel and José Manuel Barroso talk on the sidelines of Monday's EU summit.

The Deutsche Börse and NYSE Euronext exchange mega-merger is dead, the objections of competition officials prevailed, but it followed a tremendous political tussle in Brussels, full of intrigue and skulduggery. Here are some of the snippets from the final days:

The Merkel change of heart: A great mystery in this merger case was the deafening silence from Berlin. Angela Merkel, the German chancellor, was always said to be on the verge of intervening on behalf of the German exchange. But opportunities to say something came and went. Her reluctance was put down to coalition divisions and a complicated political picture in Hessen, the home state of DB.

But in the final days, Merkel did have her say, at least in private. Read more

Finn Olli Rehn, last week in Davos, has been seen on Finnish media by 45% of his fellow countrymen.

In Brussels, being a member of the European Commission, the EU’s executive branch, is about as high as an official can climb in the eurocracy. But just how well are those Brussels luminaries known back in their home countries?

Thanks to the commission itself, we now have a good idea. According to a telephone survey conducted by Eurobarometer – the results of which haven’t been published, but were presented to commissioners during a meeting Tuesday – the best-known is Finland’s Olli Rehn, the economic commissioner who has been in the press almost constantly thanks to the eurozone crisis. He also contemplated running for president of Finland last year, which undoubtedly helped boost his score.

According to the survey, obtained by Brussels Blog, 45 per cent of Finns said they had seen or heard Rehn in the media, far ahead of the rest of the commission – including its president, Portugal’s José Manuel Barroso, who finished 9th with 31 per cent of Portuguese respondents saying they’ve seen the former prime minister on local media.

At the bottom of the list were commissioners from two of the largest member states: France’s Michel Barnier, who only 8 per cent of French respondents said they had heard or seen, and Britain’s Cathy Ashton, who came in at 16 per cent.

The complete list after the jump. Read more

Since the start of this year, Europe’s financial crisis has been given many labels - a sovereign debt crisis, a banking sector crisis, a crisis of the euro itself.  But rarely is it asked whether the European Union’s single market, which is the foundation stone of EU integration in the modern era, is under serious threat.

One person who has asked this question is Mario Monti, the distinguished former EU commissioner for the internal market and competition policy.  In May he presented a report on how to reinvigorate the single market to Commission president José Manuel Barroso, who had commissioned it from him last year.  It delivered a blunt message.  Many Europeans – citizens as well as political leaders – looked at the single market with “suspicion, fear and sometimes open hostility”, Monti said.  “The single market today is less popular than ever, while Europe needs it more than ever.” Read more

Are they just teething problems?  Or is something more serious at stake?  One way or another, the first signs are emerging that the European Union’s new foreign policy structures, established under the Lisbon treaty that came into force last month, are capable of producing just as much discord and disharmony as the old arrangements.

Let’s take the EU’s response to the Haiti earthquake.  Baroness Catherine Ashton, the EU’s foreign affairs supremo, convened an emergency meeting on January 18 at which the 27-nation bloc quickly and efficiently agreed a generous aid package for Haiti worth over 400 million euros.  At a news conference after the meeting, she was asked if she would be visiting Haiti and, if not, why not.  She replied that she wouldn’t be going, because the United Nations had requested her and other foreign dignitaries to stay away in order not to disrupt the emergency aid effort.  However, Karel De Gucht, the EU’s outgoing humanitarian aid commissioner, would travel to Haiti.  A perfectly sensible response. Read more

The inimitable Nicolas Sarkozy couldn’t resist the temptation to term last week’s allocation of jobs in the new European Commission as a victory for France and a defeat for Britain.  In particular, the French president crowed, he had outmanoeuvred the Brits by securing the internal market portfolio, which is responsible for financial regulation, for Michel Barnier, the new French commissioner.

It was certainly a little undiplomatic for Sarkozy to uncork the metaphorical Champagne bottles so soon after the announcement of the new jobs.  There are many raw nerves in the British government and in the City of London about how various EU measures in the pipeline may damage the UK’s financial sector.  Sarkozy touched every one of those nerves with a rod of fire. Read more