Should the City be worried about the EU's new Brexit negotiator?

Jake Cordell
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How will the City fare under the new Brexit regime?
How will the City fare under the new Brexit regime? (Source: Getty)

The politician once dubbed “the most dangerous man in Europe” is set to lead the European Commission’s negotiations with the UK over the terms of Brexit.

Frenchman Michel Barnier, a “friend” of Jean-Claude Juncker, scooped the newly-created chief negotiator role yesterday and is expected to be one the the EU’s top representatives in discussions with the likes of Boris Johnson and David Davis.

The announcement raised eyebrows in the UK due to Barnier’s formidable reputation.

During his four-year spell as the EU's top financial services lawmaker after 2010, the UK and the EU were in a state of near-permanent opposition over plans for stringent controls on the City of London. European plans to introduce a financial transactions tax and force firms to trade euro-denominated bonds inside the Eurozone were only killed off after a massive backlash, intense lobbying and high-profile court case brought by the UK.

Read more: What now? The EU and the single market

But could Barnier, now tasked with defending the EU's interests in the upcoming exit talks, have the final word?

A veteran of European politics, Barnier’s political career began as a regional councillor in the south east Savoie region of France more than 40 years ago. He climbed his way up the greasy pole to become a government minister in 1993, and has been hopping between Paris and Brussels in various foreign affairs and European briefs since.

“It is a relatively provocative appointment,” said Anand Menon, professor of European politics at King’s College London. “In the past he has been quite bullish about regulating financial sectors and over the position of the City.

Pawel Swidlicki, policy analyst at Open Europe agreed: “During Barnier’s tenure … the UK and the EU clashed repeatedly. His appointment suggests that the Commission will take a tough approach during the Brexit negotiations, particularly when it comes to financial services.”

Read more: Can we make the UK's Brexit retreat a treat for non-EU trade?

Despite talk of his appointment as a “declaration of war”, Brussels-watchers cautioned that such fears may be a little “overdone”.

“I don’t think he’s a hard-liner. His position made sense at the time,” Gregory Claeys, a research fellow at Brussels think tank Bruegel told City A.M.

Conservative MEP Syed Kamall also suggested Barnier was more pragmatic than he is sometimes given credit for in the UK. “I worked well with him in the past, even though we did not always agree. He doesn’t always take a market-liberal approach, but he is a fair man.”

In Brussels, Barnier is seen as a deeply committed European, who will fiercely stand up for the EU in the negotiations and will not agree to anything that comprises the interests of the remaining 27 members. There is not expected to be any love lost when it comes down to the nitty-gritty of deal-making.

“He’s a bloody good negotiator”, said the Institute of Directors’ Allie Renison.

Bruegel’s Claeys also warned the UK to expect a “tough” adversary on the other side of the table, while former business secretary Vince Cable said Barnier was a “suave, clever, wise, very formidable man” who has the potential to “run rings round UK ministers”.

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