Thursday

19th Oct 2017

EU citizens no longer see benefits of internal market, Barnier says

The EU needs to revert to the principles of a social market economy as its citizens no longer feel served by the single market, EU internal market commissioner Michel Barnier has said.

Speaking to a group of journalists on Monday (20 September), the centre-right French politician pleaded for finding "the means for reconciliation between citizens and the European economic project. And to re-find the initial objective [of the European Community] which was very much a social market economy."

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  • Barnier: 'The financial crisis is like the environmental crisis, people have very short memories' (Photo: European Parliament)

He indicated citizens no longer realise that the internal market, long considered among the EU's most cherished achievements, "improves their lives."

The current economic climate with member states on the defensive amid rising unemployment and citizen unrest has made his job more difficult. The internal market remains vulnerable to the "increase in populistic and nationalistic tendencies," he said.

The commissioner has two major initiatives in the pipeline to safeguard the "heart of the European project" – the relaunch of the Single Market next month, a major undertaking containing between 30 and 40 new proposals, as well as a proposal on making sanctions for market abuse "heavier."

A former foreign and farm minister, Mr Barnier is also being closely watched for how he deals with regulating financial services where the current laissez-faire culture is seen as having led to the global economic crisis.

Having secured on Wednesday (22 September) what critics say is too weak an agreement on financial oversight in order to prevent such a crisis happening again, the commissioner has a raft of other proposals in the offing including on regulating short selling; improving transparency in the derivatives market; strengthening sanctions for violations of financial services laws and forcing banks to put aside more capital reserves.

He remains attached to the idea of a European ratings agency - ratings agencies analyse the risks facing companies and bonds issuers and were blamed for failing to anticipate the financial crisis - and says that the idea of the tax on financial transactions is one of the major questions ahead of him and his colleagues.

Financial services, argues the commissioner, must be put back at the "service of the real economy."

The drive to regulate risks being undermined not only by national capitals, particularly London, home to the EU's most important financial centre, but also a creeping complacency about the crisis being over.

"The financial crisis is like the environmental crisis, people have very short memories. It is our responsibility as politicians to remind people and to fully learn the lessons of the crisis and not let people forget those lessons," the commissioner said.

"This includes banks who - though I stress not all of them - say to us that now it is 'business as usual'."

With the European Commission having come under fire in the past from both the European Parliament and some member states for reacting too slowly to the economic crisis, Mr Barnier says he believes the executive is now "doing what is expected of [it]."

"I believe very strongly in the commission's sole right to propose legislation [and] that we must use it in a proactive way and not in a defensive way. And that it is something I try to do in my own area."

Comparing his current mandate to his time as regional commissioner in 1999-2004, Mr Barnier noted that one of the biggest differences is the increase in the number of member states, from 15 to 27, and the greater powers and "diversity" of the European Parliament. This makes getting agreement on issues a much more time-consuming affair, he said.

Analysis

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