16 April 2021

European Commission: Interview with Michel Barnier

The EU-UK agreement in December was in large part thanks to you as the EU’s chief negotiator; what in particular did you take away from that rather extraordinary four-year experience?

At the end of the day, it was a negotiation. It was indeed exceptional, but in my view it was a negative negotiation because it involved a separation. All separations have consequences and Brexit has many human, social, economic, financial, technical, legal and political consequences which are often underestimated or poorly explained. Together we all tried our best over those four years to limit the severity or seriousness of the consequences.

And we did it by working together. That is the main thing I will remember, because to me that is extraordinary. I was able to work with everyone in a very inclusive way. The Taskforce was set up with that in mind and included very talented, determined people from all Directorates-General, approximately 70 people in all. And when we really got down to the business of negotiating the agreement on our future relationship, I was able to reach out even further and involve the Directors-General and their staff. The last two months were exemplary from that point of view since there were almost 180 of us involved in the negotiations every day, including DG FISMA. Right up until the end, we reported to the whole team on how the discussions with the UK were going: the problems, the failures, the disappointments, the progress. We also used this internal method with the Member States and the European Parliament, which explains why the 27 Member States remained so united. From the outset, we decided to tell everyone everything at the same time, and this created trust.

For us, the lesson that can be drawn from this negotiation, beyond the substance itself, is that the solidarity of the EU27 was based on the principle of telling each other everything. Everyone was together around the same table, each expressing their specific sensitivities or concerns. Thanks to this inclusive way of working right up to the end, any concern of one Member State became the concern of the other 26. This unity was something that the UK had difficulty understanding.

This agreement does not specifically cover financial services. There is still a great deal to be defined in this regard. How do you see the future relationship between the UK and the EU27 in this area?

The ground rules were set from the beginning in the case of financial services. The main topic, namely cooperation and equivalence between the British financial industry, in particular the City, and ours, was excluded from the negotiations. As it has done in the past with other countries, such as Canada or the United States, the EU has always applied a different method, i.e. not negotiation in a free trade agreement but the unilateral granting of equivalence in certain areas. We do this where it is in our interest to establish and grant equivalence and where it also guarantees the protection of what I consider to be the most important aspect, namely the financial stability of the euro area and the single market. We talked about it with Mairead McGuinness, who shares this conviction that I also had when I was in charge of financial services as a Member of the European Commission. This is an absolute priority on which there can be no compromise. It will be the work of John Berrigan and the entire DG FISMA team under the authority of the Commission and the various Commissioners concerned to grant equivalence in certain areas if and when they deem it useful. These ground rules were very clear, but the UK tried on several occasions to introduce the idea of including equivalence in the agreement and, up until the last moment, it even tried to include prior agreements and thereby circumvent our system of equivalence, which was not possible and which the President of the Commission rejected.

Nowadays we talk a great deal about a more strategic Europe, a more sovereign Europe, and its role in an unstable geopolitical world. How do you see this new, more strategic Europe?

First of all, this idea that Europe has a global role was the very essence of what the founding fathers or the founding countries had in mind. It was not a view shared by everyone, particularly the United Kingdom, which has always had reservations on this point. I thought that, over time, this could be overcome; that is why I was and still am sorry that Brexit came about. Today, it is clear from the global world we live in that if we do not rely together on the same internal market, which is a kind of ecosystem, with standards, regulations, oversight and jurisdiction, and if we do not also have, based on this single market, the ability and the political, economic and financial will to protect our pre-defined strategic assets, then we will be irrelevant and we will have only a passive role in our own destiny. So if we want to take an active rather than a passive role, if we want to be autonomous and independent in some areas, while at the same time working together, we need to define the strategic assets of the EU itself, not just of individual countries, in the digital industry, in defence, in the field of certain industrial strategic assets, and also with regard to health, valuable materials or cutting-edge sectors. We should not be naive about defending them because from what I see other major powers or countries do not hesitate to defend their strategic assets.

On that point, do you see a particular role for financial services in this European Union that is asserting itself on the global stage and wants to be more independent and sovereign?

It is well known that financial services are strategic both for the stability of the economy and for financing the economy on the condition that those at the helm of these financial services understand that they must work for the real economy and not for themselves. This is why the whole regulatory agenda that was put in place at European level when I was so fortunate as to be the European Commissioner responsible for this portfolio, and which my successors have continued, is still essential. It needs to be confirmed, completed, evaluated, perhaps corrected, but whatever happens it must be preserved because we need these rules to ensure transparency, accountability and regulation in those areas where they were not, or no longer, sufficient. So I believe fundamentally, given the boost that financial services provide for the real economy, that this is a strategic asset. We do not yet have complete control over this area, since for example market infrastructure needs to be built here in the euro area and in the single market. In my personal opinion, this will be one of the challenges of the coming months. Regulation and oversight are also tools that need to be maintained, in particular by asserting ourselves in the discussions taking place at global level — in the Basel Committee, as we know, and in other important international financial regulation bodies — provided that we Europeans are there to speak with one voice and adhere to clear rules.

European Commission

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