Monday

30th Mar 2020

UK commissioner deprived of power to oversee bankers' pay

  • Bank bonus pay will fall under the remit of the new EU justice commissioner, Jean Claude Juncker's officials said Friday. (Photo: stumayhew)

The European Commission has played down suggestions that it had deliberately stripped the UK's commission candidate of responsibility for policing the EU's bank bonus rules.

Officials with Commission President designate, Jean-Claude Juncker, said that the decision to put bank bonus rules in the hands of the bloc's justice commissioner had been taken before Jonathan Hill, a British Conservative, had been nominated for the post of financial services chief.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

"This was a decision that was made when forming the justice portfolio," Juncker's spokeswomen Natasha Bernaud told reporters on Friday (26 September).

"This was a decision that was taken and made public on 10th September…so it's really nothing new," she added.

Under the proposed division of competences within the EU executive, Hill will be responsible for financial stability, financial services and capital markets. Aside from financial sector regulation, the portfolio will include the completion of the EU's ambitious banking union legislation.

Meanwhile, oversight of the bank bonus rules will be part of the portfolio of Czech politician Vera Jourova, the proposed justice commissioner, in the context of company law.

The UK is currently embroiled in a court battle with the European Commission over the bank bonus rules, one of three legal challenges to financial services rules that the UK has lodged with the European Court of Justice in the last three years.

The EU's institutions passed several laws aimed at curbing excessive executive pay in the 2009-2014 term, instigated by outgoing single market commissioner Michel Barnier.

Under the latest capital requirements directive adopted in 2013, bank bonuses are capped at the same level of salary, although banks are permitted to pay bonuses worth up to twice basic salary levels following a shareholder vote.

However, Bernaud stated that the capital requirements rules for banks will form part of Hill's portfolio.

The nomination of Hill, a former financial sector lobbyist and a member of David Cameron's cabinet, was a surprise move by Juncker after the UK prime minister had publicly opposed the Luxembourg politician's nomination as Commission president.

But Hill will still face a tough examination in the European Parliament on Wednesday (1 October) with the assembly's left-wing factions particularly sceptical of his candidacy.

Political group officials have suggested that Hill's nomination was a trap set by Juncker to ensure that UK Conservative MEPs, which dominates the Conservative and Reformist group of MEPs (ECR), endorse his Commission when deputies vote later this autumn.

In a statement on Friday (26 September) Gianni Pitella, the leader of the centre-left group, said that he had "obtained a promise from Mr Juncker on depriving Lord Hill of responsibility for overseeing financial sector pay and a commitment about continuing the reform of the financial sector."

In his written reply to questions posed by MEPs on the economic affairs committee, Hill indicated that he was not minded to defend the UK government's opposition to the bonus caps. "It is the Commission's policy to uphold the law…our institutions will defend the legislation in the normal way," he said.

"If a member state does not comply with EU rules, or tries to circumvent them, I will ensure that full use will be made of the various enforcement tools available."

Agenda

EU struggles to remain united This WEEK

EU countries continue to wrestle with economic shock of pandemic and with sharing of medical resources, posing deep questions on solidarity in the bloc.

Interview

How Europe coped with pandemic 100 years ago

The 1918 flu pandemic "was just another thing to put up with" for people numbed by World War One - but there were also parallels with today, a British academic says.

Coronavirus

Coronavirus crisis deepens, but solidarity booms

Despite the horrific impact of the coronavirus on the EU's economy and daily life of its citizens, solidarity is spreading across communities in all member states - with offline and online initiatives.

Agenda

EU struggles to remain united This WEEK

EU countries continue to wrestle with economic shock of pandemic and with sharing of medical resources, posing deep questions on solidarity in the bloc.

Opinion

Poland's sham presidential election in a pandemic

Declaring a state of emergency is not even an option on the table for Poland's Law and Justice (PiS) chairman Jarosław Kaczyński - as it would render the 10 May election impossible.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. EU struggles to remain united This WEEK
  2. How Europe coped with pandemic 100 years ago
  3. Coronavirus crisis deepens, but solidarity booms
  4. Romania: Inside the EU's worst healthcare system, as virus hits
  5. Pandemic is time to recognise gig economy workers' rights
  6. EU doctors: bring refugees on Greek islands to safety
  7. Russia's top coronavirus 'fake news' stories
  8. WHO warning on lockdown mental health

Join EUobserver

Support quality EU news

Join us