UK can’t have its EU ‘cake and eat it’

The UK won't be able to have its "cake and eat it" when it comes to deciding on its membership of the European Union in the next couple of years, according to European Commissioner for financial stability, financial services and capital markets union, Jonathan Hill.

Speaking to The Irish Times on the fringe of a banking conference in Dublin, Mr Hill said there has yet to be a debate about the alternative to EU membership for the UK, which is set to hold an in-out referendum within the next two years.

“They [voters] will look at the evidence and they will weigh things carefully in the balance and they will look at the alternatives, which is part of the debate that hasn’t really been started in the UK,” Mr Hill said.

“People maybe try and give the impression that you can have your cake and eat it but you can’t have your cake and eat it in politics or life really.”

On whether he thinks British voters will vote to stay in the EU or exit, Mr Hill said they would see what prime minister David Cameron "has to put to them and will then make their mind up in a sensible, rational, British way".

Mr Hill said he would “play whatever part I can” in the Brexit debate but “by and large” he believes that voters will “listen carefully to the views of local businessmen” and will be “sceptical” about the views articulated by establishment figures.

Mr Hill's main project is to deliver a capital markets union in the EU by 2019, which he believes many British businesses support. "My job is to deliver the project for the whole 28 [members]," he said. "I'm very struck at the number of people in the financial services sector in the City of London who see the advantage of being part of a big single [capital] market and are very keen that Britain should remain part of that."

On talks between Greece and the Troika on its bailout, Mr Hill said: "We're still working away. Obviously there are quite significant gaps still between the two sides. The clock is ticking. At the moment, everyone both in Greece and in the commission and in the euro group [of finance ministers], they're working for an outcome that means that Greece remains in the euro zone.

“There are still big gaps, they know they’ve got to narrow them and that’s what they’re seeking to do.”

Earlier, in a speech to the Federation of International Banks in Ireland, Mr Hill said his work on a capital markets union covering all member states is to encourage investment for the longer term.

“There is a shared analysis of the benefits that a stronger single market in capital can bring,” he said. “That it can support more cross-border risk-sharing, create deeper and more liquid markets, and increase the resilience of the financial system through diversifying the sources of funding to the economy. Or, to put it another way, it will better link savings with growth.”

Mr Hill said there are three core areas of the project – increasing funding options for business, creating more opportunities for investors, and encouraging cross-border investment.

“We need to work on the key links in the chain that are missing or not yet delivering on their potential: angel investment, venture capital and innovative forms of finance such as equity crowd-funding.

“We will review our venture capital regulation EUVECA to support the growth of this market further – both in terms of allowing a wider range of funds to participate, and a wider range of possible investments. We will also investigate how we can eliminate passport barriers to funds raising capital across Europe.”

For large companies, Mr Hill said the EU needed to make it easier to raise capital by issuing debt or equity on public markets. “There is probably more we could do to build on the success of private placements in Germany and France for companies wishing to place large amounts of debt with institutional or qualified investors,” he said.

Mr Hill is also looking at a proposals to make it easier for investors to assess the risks of securitisations.