Tuesday

13th Apr 2021

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

Become an expert on Europe

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

... or subscribe 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."

How the pandemic became an EU goldmine for crime

The recession set to hit Europe after the pandemic will help organised crime penetrate legitimate business and recruit out-of-work specialists, the EU's joint police agency, Europol, has warned.

China responds to 'low-efficacy' vaccine fears

Concern over the low efficiency of Chinese-made vaccines has been mounting since China's top official said existing vaccines offer low protection against Covid-19 - raising questions for those nations relying heavily on the Chinese jabs. That includes Hungary and Serbia.

News in Brief

  1. Putin refuses to talk about military build-up, Ukraine says
  2. EU bank to help Greece manage corona-recovery funds
  3. Johnson & Johnson vaccine deliveries to EU begin
  4. EU sanctions commander of Iran's Revolutionary Guard
  5. UK opens investigation into ex-PM Cameron lobbying
  6. 'Significant differences' in EU-UK talks on Northern Ireland
  7. Bulgarian PM reveals price rise in new EU-BioNTech deal
  8. Biden sending envoy to Brussels

How the pandemic became an EU goldmine for crime

The recession set to hit Europe after the pandemic will help organised crime penetrate legitimate business and recruit out-of-work specialists, the EU's joint police agency, Europol, has warned.

Podcast

Why Ursula von der Leyen won't go

Ursula von der Leyen appears secure in her job as president of the European Commission. That's despite a troubled vaccine rollout in which delayed deliveries can cost lives and livelihoods.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. How the pandemic became an EU goldmine for crime
  2. China responds to 'low-efficacy' vaccine fears
  3. Merkel party chiefs support Laschet's chancellor bid
  4. EU refuses to bail out Montenegro's China loan
  5. Industry lobby to 'co-decide' on nearly €10bn EU public money
  6. Why Ursula von der Leyen won't go
  7. Incorporating gender in trade policy to benefit all
  8. Does Italian regionalism actually work?

Join EUobserver

Support quality EU news

Join us