The Finnish commissioner-designate sees a threat of a regulatory “bottleneck” stifling growth, while Jonathan Hill wants regulation tweaked and growth to prosper. Does the European Commission’s focus on growth above all else mean the pensions industry no longer faces an uphill battle against further regulation?
The words “quick” and “effective” are not ones often associated with the European Commission – at least by its critics.
Yet the language coming out of Brussels ahead of Jean-Claude Juncker assuming the presidency has been markedly different than that employed in the recent past, stressing the importance of a nimble executive that does not unduly burden the economy with red tape.
Frans Timmermans, the Dutch nominee for the College of Commissioners, will specifically be tasked with the oversight of red tape, and granted the power to veto any decision that increase the regulatory burden unnecessarily.
Meanwhile, Jonathan Hill, Britain’s member of the Juncker Cabinet in charge of stability and regulation of financial markets, has used the aforementioned “quick” and “effective” to describe how he would react to proposals to streamline financial regulation.
Answering questions from the European Parliament’s Committee on Economic and Monetary Affairs ahead of his confirmation hearing with lawmakers tomorrow, Hill says the prior overhaul of financial regulation completed “while the flames of the crisis raged” is a remarkable feat, and praises the leadership of outgoing internal markets commissioner Michel Barnier.
However, he distances himself from the legacy with his next breath, saying that his appointment would mark “a new phase” without a significant increase in financial regulation.
“Although we must continue to be alert to the emergence of new risks in our system and stand ready to take appropriate action, we are unlikely, over the next five years, to need to pass the same amount of new legislation again,” he says.
As Hill sees it, his focus will be on regulatory implementation, enforcement and, importantly, evaluation – the last potentially being code-speak for a relaxation of the current regulatory requirements.
He adds that if regulation is not flawless, “quick and effective adjustments” are required, emphasising the need for jobs and growth above all else.
The supremacy of growth, not regulation, is also clear in comments from Jyrki Katainen.
A former Finnish finance minister and prime minister, Katainen says he wants “concrete proposals” that will do away with regulatory “bottlenecks” undermining growth in the energy, telecom and transport sectors.
Nominated for the position of vice-president in charge of the growth agenda – a new position that sees commissioners divided into topical clusters – Katainen is also very keen on greater financing of the real economy.
The development of a more diversified financial system will require the removal of barriers, again emphasising less regulation.
The resulting development of the Capital Markets Union, one of Juncker’s stated aims delegated to Hill, is likely to strengthen the hand of the pensions industry in Europe.
After all, despite the European Insurance and Occupational Pensions Authority’s continued work on the holistic balance sheet for pension funds, the Commission is unlikely to push ahead with any changes that would cause institutions to be more averse to risk.
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