Last month, the EU finalised a raft of financial services regulation on what became known as super Tuesday. From Mifid II to an agreement on the eurozone’s banking union, Europe has changed the face of financial services. It will continue to do so.
So where do the parties stand? Looking at their European election manifestos it is hard to be sure.
Despite running to 74 pages and despite the fact the party’s leader in the Parliament is economic and monetary affairs committee member Syed Kamall, the Conservative Party’s manifesto has only one forward looking promise relating to financial services.
It says: “We will ensure new rules target unscrupulous behavior in the financial services industry, while safeguarding Britain as a global centre of excellence in banking and fending off attempts to restrict legitimate financial services activities”.
Labour’s manifesto is equally vague. It broadcasts the party’s support for the bankers’ bonus cap and, rather cryptically, an “international” financial transaction tax, though it does not say whether this means EU-wide or globally.
It says the party will continue to “back reforms to big City bonuses” so they are “properly controlled”. It has also pledged that “more can and should be done to tackle tax avoidance”, including extending the disclosure of tax avoidance schemes regime in the UK, and “opening up tax havens” requiring them to pass on information about money held behind “front companies” and trusts.
It also takes up a decent sized chunk of each policy area in its manifesto having a pop at the Tories, signing each one off with Miliband’s conference speech refrain: “Britain deserves better than this”.
The Liberal Democrats’ manifesto gives the most space over to financial services (three pages), perhaps no surprise given the influence Econ chair Sharon Bowles has had over European policy. But it still lacks detail.
The party will continue to work for a “safer financial sector”, clear and understandable EU-wide information documents for financial products and “fairer rules that will clamp down on manipulation of energy and financial markets”.
Ukip’s manifesto is only six pages long and three of those are just pictures. After publicly disowning the party’s 2010 general election manifesto as “drivel”, Nigel Farage’s party makes an asset of another pledge sheet which is low on pledges, saying Ukip is there for a different reason to the other parties.
It says: “We don’t go there to make the EU better, more powerful, and help it pass more laws. We go there to find out what it’s up to, and let you know. Some of us spend a good deal of time there, unfortunately, making sure we know what they’re cooking up, creating an ‘Opposition’ and voting against the EU’s encroachment on our democracy.”
Steve Tolley is reporter at Money Marketing
The other European election
While you are deciding which MEP you want to represent you in the Kafkaesque world of European politics, bear in mind the election result may well decide who gets the EU’s top job: president of the Commission. This gets quite wonky but it is important, so bear with us…
The Commission is the unelected body that proposes rules. Currently led by former-Portuguese president Jose Manuel Barroso, it is about to get a new president. They help set the direction of the Commission, shape the rules it proposes and have the power to shuffle or remove Commissioners, each of whom look after a different policy area.
The European Council represents the 28 member states. Under the Treaty of Lisbon it will choose a new Commission president “taking into account” the make-up of the European Parliament, which then approves the candidate. This is the first election since the treaty was ratified and MEPs are testing the limits of this rule.
In the Parliament, national parties sit within seven wider groups: the Conservatives are in the European Conservatives and Reformers (ECR) group, the Liberal Democrats are in the Alliance of Liberals and Democrats for Europe (ALDE) and Labour are in the Progressive Alliance of Socialists and Democrats (S&D) and UKIP are in Europe of Freedom and Democracy (EFD).
For the first time each group has come up with its own candidate for the Commission presidency with the expectation that if they have a majority in the Parliament after today, their candidate will be chosen by the Council. However, the Council could refuse the candidate and has made clear it has not necessarily accepted the Parliament’s approach.
Based on the current make-up of the Parliament, the two forerunners are former-Luxembourg PM Jean Claude Junker, the centre-right European People’s Party candidate and the German, current European Parliament president Martin Schulz, the centre-left S&D candidate.
Euro-sceptic think tank Open Europe’s research director Stephen Booth says either candidate might be “difficult” for UK financial services, one in terms of making more rules and the other in terms of the UK’s voice being heard.
He says: “Schultz is more prone to intervention and more regulation and while Junker has talked about the need for Europe to do a deal with the UK he is of a very federalist mindset. So the worry with him is he wouldn’t necessarily be so concerned with the priorities of those outside of the Eurozone.”
And here is where it gets really Kafkaesque. According to a poll of polls by Cicero Consulting, EPP and S&D are expected to win around 200 seats each, ALDE around 80 and the ECR around 40 seats. So it looks like neither main group will get a clear majority in the Parliament and that only a broad coalition between the two groups and ALDE could deliver a clear majority.
Cue horse-trading and back room deals out of which former-Belgian Prime Minister and ALDE candidate Guy Verhofstadt could emerge as a compromise candidate. Known as “baby Thatcher” for his free market views he might well be the preferred candidate of the financial services industry.
At least you have a say over who gets the job now, right? Well not quite. With the Conservatives leaving the EPP in 2009, you cannot back Junker even if you wanted to. Labour leader Ed Miliband has refused to back Schulz and the Lib Dems did not back ALDE’s candidate Verhofstadt. And after all this the Commission might just put someone else in anyway.
Booth says: “All the main candidates are members of the Brussels elite which is seen as being out of touch, people do not really know who they are and none of them have been endorsed by the parties in the UK they claim to represent.”
Well I did tell you it was Kafkaesque.