As he returns to take up his seat in the House of Lords next month, Jonathan Hill can reflect on an eventful two years in Brussels. The UK’s European Commissioner announced this weekend that he is stepping down from his position, the second high-profile casualty of his country’s vote to leave the EU after his friend, Prime Minister David Cameron.
“Like many people here and in the UK, I am obviously very disappointed about the result of the referendum. I wanted it to end differently and had hoped that Britain would want to play a role in arguing for an outward-looking, flexible, competitive, free trade Europe. But the British people took a different decision, and that is the way that democracy works. As we move to a new phase, I don't believe it is right that I should carry on as the British Commissioner as though nothing had happened.”
Commissioner Jonathan Hill
From Eurosceptic to toast of Brussels
It has been quite a journey for Lord Hill, plucked somewhat reluctantly from Westminster in 2014 to the surprise of many who felt that he was not really a sufficiently high-profile candidate. He admitted as much in his resignation statement, stressing that he came to Brussels “sceptical about Europe”, but finished his time there campaigning passionately for the ‘Remain’ vote in the referendum.
And the Brussels establishment initially shared his scepticism – he was the only Commission candidate to be called back for a second hearing in the European Parliament and had to work to convince dubious MEPs that he was a) not in the pocket of lobbyists, and b) capable of handling his complex portfolio. But the extent to which he had won over his colleagues was demonstrated by the lengthy standing ovation he received in the European Parliament this week, and the tributes he received from across the political spectrum.
It was his portfolio, Financial Stability, Financial Services and Capital Markets Union, that raised eyebrows initially, and which ensured that despite his low-key style, Lord Hill was one of the most high-profile Commissioners. The UK is the financial capital of Europe (for now), and it was undoubtedly a coup for the British Commissioner to be given responsibility for regulating the City. In many ways though, he was the perfect man for the job. The last Commission had to deal with the immediate response to the financial crisis, and the finance post was held by the more interventionist Michel Barnier of France. The current Commission is refocussing on restoring growth, via the Capital Markets Union (CMU) project, and Hill is of a more laissez-faire, pro-business bent.
His time at the helm has seen the CMU Action Plan, a Green Paper on Retail Finance, and new proposals on securitisation, prospectuses, and a European Deposit Insurance Scheme, along with a review of the whole regulatory burden caused by financial legislation.
“Lord Hill has done an outstanding job in his time as Commissioner for Financial Stability, Financial Services and Capital Markets Union and in particular by championing the CMU project. There has been much achieved already, including the Cumulative Impact Assessment, for which he should be congratulated”
Simon Lewis, Chief Executive of the Association for Financial Markets in Europe
Much like David Cameron, he will not step down immediately, but will bring his term to a close on the 15th of July, when Commission Vice-President Valdis Dombrovskis, the former Prime Minister of Latvia, will take over. He is a natural enough replacement, as the Commission’s structure of project teams meant that he oversaw a lot of Lord Hill’s work anyway. But some see more significance in the man responsible for the Eurozone taking over the CMU. In the absence of the UK, many are talking about the end of the “multi-currency union”, with the CMU falling more into the pattern set by the Eurozone Banking Union with stronger centralised supervision.
Ultimately a new UK Commissioner may well be appointed to run out the clock on the UK’s EU membership, but it is almost certain that he would be given a portfolio of little consequence. Meanwhile Lord Hill laid out the future for the financial sector as he sees it in an interview with the Financial Times the day after his resignation. “The nature and the shape of the financial services industry in France or in Germany — from the banking and any other point of view — is pretty different from what it is in the UK. So the direction of how policy will evolve will reflect those different voices, without the British voice in there to balance.”
As Customer Engagement Manager, Alex Boxell is responsible for the strategic development of DeHavilland's core products.