The French President can behave like a petulant teenager, yet the British press (and the British Bankers’ Association) seem to not understand that the best thing to do with a petulant teenager is to ignore it.
The Times led today with the headline “Banks blast ‘hostile’ Sarkozy over City rule gibe” and followed it up with “We are in charge now, Sarkozy tells the City” and “It’s déjà vu all over again as Sarkozy takes aim at City of London“. The Evening Standard went with “Darling in rearguard action to stop French pulling City strings“. The BBA’s press release on the matter is equally inflammatory, starting with these words:
The hostile comments of French President Sarkozy have damaged public confidence in the EUs new institutions and raise serious questions about the impartiality of the French nominee to the European Commission, the British Bankers Association said today
Just calm down folks, seriously calm down. And what are those new institutions exactly? OK, the Treaty of Lisbon makes the European Council an institution formally, but they can’t mean that can they?
But I digress… why is all of this a storm in a glass of Bourgogne?
Firstly, Sarko is a loose cannon. What he says does not even represent France, let alone come close to being adopted by the European Union.
Secondly, Michel Barnier, the nominee in question, has been a Member of the European Commission before (Regional Affairs – 1999-2004). I don’t think he was stellar, but he was one of the better members of the Prodi Commission. Why should he be any more partial this time around?
Thirdly the notion that the Commissioners are impartial is rubbish, and the BBA knows that very well. Was Peter Mandelson, Trade Commissioner until 2008, impartial in the way the BBA claims Barnier should be? Of course not. In fact I would bet that they organised meetings with Mandelson during his term to get fellow Commissioners to back policies favourable to UK banks.
Fourth, the Times and Evening Standard articles completely ignore the other appointment in Directorate General Internal Market (DGs are like ministries), that of Brit Jonathan Faull to be Director General – the highest ranking civil servant in the DG. Reuters confirms that news here. So the top politician is French and the top civil servant English. Perhaps not equal, but a fact to consider before having a mis-guided rant.
Fifth, the notion implied by the Evening Standard that Alistair Darling is mounting a rearguard action is untrue. If anything it’s an initiative on the front foot. No legislation has been drafted yet, that is going to take months, and then it will go through the codecision process and be subject to amendment by the European Parliament. Yes, agreed, the UK does not have a veto as QMV will apply, but there are 27 Member States and 736 MEPs in this game, a fact that the UK newspapers have conveniently neglected.
Sixth, why do all the newspapers buy all this pro-City of London crap anyway? Has no-one actually realised that it was the British banking sector that landed us in large part in this mess (or at least exacerbated the mess) and actually legislation to make banks serve the people, rather than the other way around, might not be a bad idea? Or is that about as naive as to hope that the British press might have a go at accurately reporting the EU?
So – in conclusion if you’ve got this far – what now? For sure there will be regulation of some sort. For sure it will have an impact on the City of London. But the UK government, UK banks and anyone else implication should be working diligently, preparing a lobby strategy, and getting ready to make their case in Brussels, just like any sensible people do about any legislation that could be brought up (handy therefore that the Mayor is not closing the London Office in Brussels).