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Monday, November 23, 2009

A fox looking after the chickens

Number 10 is facing growing accusations that Gordon Brown had 'sold Britain down the river' once again by giving up the influential EU trade portfolio currently held by the UK's Cathy Ashton in return for the arguably less important external relations role.

Not only that, but according to French diplomats and a Commission source speaking to Le Monde newspaper, the whole sorry stitch-up was a deal brokered with Nicolas Sarkozy who in return for backing Ashton for Foreign Minister, secured GB's support for French MEP Michel Barnier to bag one of the most important Commission posts of all - Internal Market.

As Open Europe's Mats Persson told the Telegraph:

“This appointment is part of a very deliberate French strategy to challenge the anglo-saxon model in general and the prominence of the City of London in particular."

Because let's be clear: with Barnier in charge of the heaviest economic portfolio in the Commission we’re guaranteed to get two things: more 'Europe' and more regulations.

Looks like GB has been outmanoeuvred in Europe yet again. Don't get us wrong - the Foreign Minister role is a definitely a biggy. In charge of up to 7,000 staff and a £45 billion 3-year budget for the "biggest diplomatic service in the world", in the words of current foreign policy bod Javier Solana, Cathy Ashton is being described as the face of Europe on the world stage.

But as high-profile as that may be, the key thing to remember in all this is that the UK has now been completely ruled out of every single one of the important economic portfolios in the Commission - Internal Market, Competition, Trade, Economic & Social Affairs, even the rumoured new Financial Services post. In fact, France has made crystal clear that it doesn't want Jose Barroso to separate the financial services side of things from the Internal Market portfolio - meaning Barnier will be in charge of the lot.

Former Minister Michael Fallon sensibly asked David Miliband in Parliament today:

"Why did the Prime Minister allow himself to be outwitted by the French into conceding the key internal market and financial services job with a result that we will have a French commissioner regulating the City of London whilst Baroness Ashton is handing out the Ferrero Rocher?"

All of this is hugely important for the UK because the Commission is now so active in the area of financial and economic regulation - and it is vital the UK has a strong influence. Unless you've just arrived home from Mars, you will know the EU's current proposed rules for alternative investment funds, for instance, could be hugely damaging to the City unless they are substantially amended along the lines being pushed by the UK government and others.

Parachuting Michel Barnier into this role could be far more disastrous for the UK than any prestigious appointment to the world stage can hope to compensate for.

Why? Because Barnier is a backward-looking protectionist.

In the run-up to the EP elections he kept saying he wanted “to build a Europe that acts and protects.”

He appears to have also described himself as: “The only government minister whose politics is totally European”, and said, “Do we want Europe to be a simple regional actor and a free trade area or do we want to make Europe a global actor and a political power? My decision was made long ago.”

Most worrying of all, he said: “All problems are local and yet all the solutions are found in Brussels!”.

Even left-leaning newspaper Le Monde warned earlier this year that the "europhile" Barnier would be a poor choice for Internal Market Commissioner.

It said: “without a doubt the post is currently the most important at the heart of the European executive, after the presidency”. It pointed out that the City of London would view the appointment of a French politician to the Internal Market post as comparable “to entrusting the surveillance of a chicken coop to a fox”.

It wisely noted that “the issue of new financial regulation is too serious to become a simple stake in negotiations on the composition of the future commission”.

And don't forget, Sarkozy has said that Paris' La Défense district, which according to the FT recently is undergoing a radical makeoever, "intends to take over" the City.

Score: Brown 1, Sarkozy 2.

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