European parliamentarians have branded the appointment of Jonathan Hill to the European Commission’s financial services portfolio “provocative” and warned they will be “very tough” on him during confirmation hearings.
Gianni Pittella, president of the Socialists & Democrats (S&D) faction in the European Parliament, argued that the task of regulating financial services should not have been assigned to a “conservative with a liberal, free-market approach”.
“The financial sector urgently needs better regulation, and we will not accept any backward step on this issue,” the Italian MEP said.
“It’s a matter of principle. We promise to be very tough with Lord Hill.”
Hill, the UK’s commission nominee, has previously worked as a lobbyist for the financial sector, and was more recently a junior education minister and then leader of the House of Lords, the UK’s upper house, in the current government of prime minister David Cameron.
Rebecca Harms and Philippe Lamberts, co-leaders of the Parliament’s faction of Green MEPs, said Hill’s appointment was a “prime example” of a member state’s interest in a portfolio trumping competence.
In a joint statement, they argued that Hill was a “poacher-turned-gamekeeper” and his approach was not one needed within the new directorate general for financial stability, financial services and capital markets union.
Sven Giegold, a German Green Party MEP and member of the Economic and Monetary Affairs Committee, branded the move “provocative” and said the directorate general would “almost certainly” see its independence, established by current internal markets commissioner Michel Barnier, diminish.
The views were not shared by the pensions industry, however, with James Walsh from the UK’s National Association of Pension Funds describing the appointment as “surprising and good news”.
“Although issues such as the IORP Directive and holistic balance sheet are unlikely to go away, [this] news makes it much more likely that we will receive the good outcomes needed on these two crucial issues to secure the future of workplace pensions,” the association’s EU policy lead said.
Dave Roberts and Mark Dowsey, consultants at Towers Watson in the UK, said that while commissioners should not represent only their member state’s interests, a national government’s views should not be ignored.
“With so much UK antipathy towards IORP II, progress on this front may well wane,” they said.
However, they added that it was possible that the revised Directive would be “pushed though”, taking into consideration the concerns of the member states that formed a blocking minority last year.
“This would avoid the risks that could otherwise be associated with leaving an open file to a future Commission,” they said.
“Whichever approach is followed, concerns that capital requirements – along Solvency II lines – might be introduced through the back door now appear unfounded.”
The S&D’s Pittella did welcome the appointment of Pierre Moscovici, the former French minister in president François Hollande’s government.
The MEP said his selection as commissioner for economic and monetary affairs signalled a “much more flexible implementation” of the current debt requirements for governments.
Following Commission president-elect Jean-Claude Juncker’s reorganisation of the commissioner portfolios, Moscovici will also be in charge of tax matters, including the implementation of the financial transaction tax (FTT).
A breakdown of portfolios released late yesterday by Juncker’s office confirmed Hill would be in charge of the financial institutions directorate, home to the insurance and pensions unit, following the breakup of Barnier’s current commission.
Juncker said in a letter to Hill that he should look to “eliminate” any EU budget contributions to the European Insurance and Occupational Pensions Authority (EIOPA), paving the way for an industry levy.
The smaller internal markets commission under Juncker, to be headed by Polish commission nominee Elżbieta Bieńkowska, will cede almost all responsibility for financial markets regulation to Hill.
However, corporate governance and the implementation of the Shareholder Rights Directive will move from internal markets to the new directorate general for justice, consumers and gender equality, headed by Czech commission nominee Věra Jourová.
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