Submitted by Darren Ennis on 19-01-2012

Rumours are afoot that EU Internal Market Commissioner Michel Barnier may be gearing himself up for a possible return to Paris after the French general elections.

As a result, MHP Sources Say that we are unlikely to see the same raft of financial services proposals from the European Commission in the second half of the European semester compared with the first two and a half years of Barnier's five-year term.

"He (Barnier) hasn't got much left to propose," one knowledgeable source said, pointing to a flurry of activity by the former French foreign minister towards the end of last year.

MHP understands that if Nicolas Sarkozy wins another term in the April/May election, the former French foreign and agriculture minister may seek a post in any new government.

If Sarkozy loses at the expense of Socialist contender Francois Hollande, it is thought Barnier -- a leading member of Sarkozy’s Conservative UMP party -- may decide to step aside anyway, as being France's Commissioner but not from the ruling party is traditionally problematic. Barnier’s views are seen as being on the ultra right side of his party, so he and Hollande are unlikely to see eye to eye on many issues, including financial services regulation.

A former member of the European Parliament, Barnier ditched his post as Commissioner for regional affairs in 2004 to become foreign minister of France following a cabinet reshuffle by Jacques Chirac.

Whether Barnier remains in Brussels, MHP Sources Say he has no further major legislation to propose with the exception of the long-awaited proposal on crisis management and bank resolution which MHP understands will now be published towards the end of February. MHP Sources Say he is also expected to come forward with a package on consumer protection in financial services, known as Packaged Retail Investment Products (PRIPs). His directorate and cabinet will of course shepherd the new Group on bank ‘Structural Reforms’. But most of the work will be carried out by its chairman, European Central Bank council member and governor of the Finnish Central Bank Erkki Liikanen.

“He’s done. There is little left for him to propose. The big battles now lie in the European Parliament and among the member states, so if he did stay, this would take up most of his time,” another source said, adding that even the expert group is unlikely to come forward with “startling proposals”.

“Barroso will also take a prominent role himself with this expert group, just like the de Larosière report,” the source said, referring to a previous expert group on EU financial supervision and stability set up by European Commission President Jose Manuel Barroso and headed by Jacques de Larosière.

Therefore, banks and financial institutions would be wise to switch their attention and lobbying campaigns towards the Parliament’s economic and monetary affairs committee and the 27 EU capitals and permanent representations in Brussels.

If Barnier did return to Paris or step aside, who would replace him is anyone’s guess, but what is probably more certain is that France would keep the dossier. Firstly, Paris would not give up the extremely influential role, no matter who is running the Elysée, and Barroso is not one for reshuffling his pack of Commissioners unless he has to - based on previous midterm comings and goings in the EU executive’s mandate. Plus, if as MHP Sources Say, there is little further new legislation to be proposed in this area before 2014, there would certainly be no appetite in the Commission’s Berlaymont to swap posts.