Word has reached us that EU Internal Market Commissioner Charlie McCreevy was given a less than charitable reception at a top level City of London dinner last night, where he was meant to be guest of honour. It strikes us as yet another indication of how the captains of UK industry seem to be getting fed up with the sheer volume of regulation coming out of the EU, and in particular the Financial Services Action Plan. This costly attempt to impose a one-size fits all regulatory structure on European financial services has been described by the Paris-based Conseil D’Analyse Economique as “a heavy, complex, partially contradictory regulatory arsenal which is incapable of delivering the anticipated results.”
Speaking at the Association of Corporate Treasurers’ annual dinner at Grosvenor House, attended by 1500 bankers, and one of the major events in the City calendar, McCreevy apparently spoke of the light touch, principles-based approach of the FSAP, even going so far as to use the word “tip-top” to describe Brussels regulations, and to sing the praises of the notoriously costly “MiFID” directive as “an example to the world”.
According to our man at the dinner, “He completely misjudged his audience. He spoke as if to a crowd of Brussels-based eurocrats…He lauded the EU's important role in world financial markets and only passingly acknowledged the fact that most of this was due to London. His audience quickly became restless and ignored him. The MC had to ask for silence several times. When McCreevy finished there was mocking applause.”
Worse was to follow; Ruby Wax gave the next after-dinner speech, wryly thanking McCreevy for "warming up my audience", before going on to say "He spoke for 20 minutes. It seemed like 20 years."
As our recent poll highlighted, British businesses are becoming increasingly disenchanted with the EU. In particular the City is increasingly worried about the effect that the FSAP will have on the global competitiveness of London, the continent’s most important financial centre. McCreevy either failed to recognise this or chose to ignore it.
Similarly, in the Times today, a survey of the 100 most powerful men in UK business found that only 19% thought that the UK should change its mind and begin using the euro. That 81% disagreed just underlines the shift in business opinon from the early days of the Blair adminstration when nearly all major businesses and groups like the CBI supported the drive to introduce the single currency.
Unfortunately for the Commission, its fine talk about "tip-top" regulations and cutting back red tape is getting short shrift from businesses who know that the reality on the ground is that they are being burdened by more red tape than ever before, much of which comes from Brussels, as our research has shown.
But until the Commission wakes up to the fact that the City is tired of empty rhetoric from Brussels – and will start to vote with its feet, relocating outside Europe unless something concrete is done to deal with the problem – even relatively liberal figures like McCreevy can expect to find the Square Mile increasingly hostile territory.