McGuinness faces Brexit and Covid grilling at parliamentary hearing

Ireland’s commissioner designate Mairead McGuinness will face questions on Friday morning on topics ranging from Brexit, banking union and Covid-19 to green finance as a powerful European parliamentary committee assesses her suitability to become the new European financial services chief.

The Committee on Economic and Monetary Affairs, or Econ Committee, will make recommendations following the scheduled three-hour hearing, before the matter goes before all MEPs in the European Parliament for a vote on October 7th.

"I have a deep understanding of the importance of financial stability and financial services for business, society and citizens. The Financial Stability, Financial Services and Capital Markets Union portfolio impacts directly and daily on our citizens, particularly during times of economic crisis," said Ms McGuinness in an 17-page response to a European Parliament questionnaire ahead of Friday's hearing.

The long-standing Fine Gael MEP was picked early last month by European Commission president Ursula von der Leyen to join her team, following the resignation of Phil Hogan from the trade portfolio amid controversy over his breaking of Covid-19 self-isolation rules in Ireland in August. Latvia's Valdis Dombrovskis is poised take over the trade brief, also subject to clearance from the European Parliament.

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Financial services is a significant brief that involves working on the creation of a single market for capital in the EU, and leading reforms of the financial and banking industry aimed at strengthening stability and avoiding repeats of past crises.

Ms McGuinness pledged in her responses to the questionnaire to work to “unblock progress” towards completing a banking union.

Banking union

Initiated in the wake of the financial crisis, banking union was envisaged around three pillars: centralised financial supervision under the European Central Bank, which took effect in late 2014; the setting up of the Single Resolution Board, which became responsible in January 2016 for ordering the restructuring or winding up of failing banks; and a yet to be established deposit insurance scheme, which is opposed by some member states.

"Completing Banking Union as well as Capital Markets Union will provide for greater financial stability as well as a stronger financial services sector in Europe, helping to underpin the long-term economic recovery, and will focus in particular on the role of SMEs," said Ms McGuinness.

“At the same time, I am keenly aware of the need for significant transformation of our economies and society towards a greener and digital future, including a common response to crypto-currencies.”

With the Brexit transition period coming to an end this year, UK financial firms will lose the automatic right to offer services across the EU and will have to rely on the union granting so-called equivalence for them to do business with customers in the region.

“As tensions in the overall EU-UK negotiations have increased, we continue to prepare for all possible scenarios, including a no further equivalences scenario,” said Ms McGuinness.

“I am convinced that the systematic and diligent work carried out by the Commission and the European supervisors to date will underpin the robustness of the EU financial system to cope with all scenarios.”