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02 October 2014

Hill at ECON: what next?

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ECON faces its own test of the logic of these Hearings. There can still be a very good outcome for Europe.

After three hours of grilling yesterday, Hill seemed to have won over doubters on many points as his UK Parliamentary schooling has certainly taught him how to charm opponents. BUT it seems that was not enough as the Committee clearly felt that he was insufficiently informed on the issues and now wants a second Hearing. But this raises a problem of logic for the Committee itself.

1.       One must make the assumption that nomination decisions are made purely on the merits of the person before the Committee rather than playing political games between the parties. The reputation of the Parliament as a whole is at stake here: these Hearings have evolved - Parliament by Parliament - into an effective method of enhancing Parliament’s power by forcing the Commissioner-designate to promise full co-operation. An unseemly party political row could set that back decades.

2.       The Committee wanted to be sure of the independence of the candidate – from the country of origin and from commercial interests. Hill said all the right things and appears to have done the right acts by selling his shares. The true test of independence will only come in the years ahead at moments of pressure – but he has made powerful `vows’ on the record that he is now `married’ to Europe alone.

3.       The Committee’s comments have focussed on his technical grasp of his dossier – and with some reason. In the 10 days since being given the specific brief, he will have had a steep learning curve. Does the Committee want him to come forward with detailed proposals for every aspect of say Capital Market Union? Surely not – or what would be the point of subsequent consultations etc. How could these views have been created without such full consultations – the essence of the Lamfalussy process pushed through at the insistence of the ECON committee circa 2002?

However, some of the key questions from ECON members were reasonably predictable as many of the members have been fighting on these issues for the past few years. Surely he could have rehearsed some of the technical arguments and stated that they were not yet resolved, so need further discussion. Issues such as a common deposit guarantee scheme are not within the gift of the Commission when the Members States are deeply divided. “Will you produce a proposal within 12 months” is an easy No – within this term could be a `maybe’. But the existence of an appropriate eurobill structure (as proposed by this author) would obviate the need for this anyway. Not to have an opinion on such a neuralgic issue (at least for the euro area) as “Eurobonds” seems quite an oversight. Fluffing the resolution of CCPs is also to be unaware of the next (and massive) risk that is being created by the G20 – as implemented by the EU.

What next? Doubtless DG `Financial Stability’ will now analyse every question from ECON members and prepare the next Hearing with a discussion of the issues involved to display a depth of understanding. But it would still be entirely wrong to propose detailed policy prescriptions put together on the back of the proverbial `fag packet’.

Commissioner Hill may be a bit chastened when he takes office on 1 November – but he will certainly treat ECON with due respect. That should cement a co-operation that will be good for Europe.

© Graham Bishop

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