‘Change is coming on the 1st of January, we need to be prepared’

Ireland’s new EU Commissioner Mairead McGuinness is urging businesses to be prepared as Britain moves closer to departure from the European Union. The Drumconrath resident spoke to ANN CASEY about her new role and challenges that lie ahead for Ireland

Brexit deal or no deal – there will be increased red tape and paperwork, while trade between Ireland and the UK will be subject to customs and animal health checks – that was the stark message from Ireland's new EU commissioner Mairead McGuinness this week.

“The European Commission has published over 80 preparedness notices for different sectors and I advise all businesses that trade with the UK to study these carefully,” the Ardee native advised.

“Change is coming on 1st January 2021. The UK is leaving the single market and the customs union. That means that trade will become more difficult and less fluid between the EU and the UK, which will impact the economy.

“Of course the Ireland/Northern Ireland Protocol means that goods will continue to flow freely on the island of Ireland, and that will apply whether a free trade deal is reached or not. If there is a deal – as we continue to hope there will be – there will be no tariffs and no quotas, which is particularly important for Irish farming and the wider agri-food industry, as agricultural tariffs are usually among the highest. ”

Ms McGuinness was appointed EU Commissioner for Financial Stability, Financial Services and the Capital Markets Union last month. The portfolio covers a wide range of issues from banking regulation, anti-money laundering measures, sustainable finance, digitalisation of finance and protecting consumers in accessing financial services.

“A core part of my work will be to ensure that finance contributes to a more green and sustainable future. Our goal in Europe is to be climate neutral by 2050. We must ensure that finance and capital flow to investments that have sustainability at their core and that contribute to a green recovery.

“We also need to adapt to technological change – a financial system that is resilient to cyber-attacks, considering whether a digital Euro could serve consumers and businesses while maintaining support for cash, making instant payments a reality, and encouraging innovation and FinTech at the same time as ensuring effective regulation and supervision.

“I also want to focus on EU consumers and to make sure that their voices are heard in the sector.”

The Commissioner said Covid-19 had been a shock to the public health systems and to economies of EU member states, but the EU will borrow €750 billion to support member states in the recovery.

“Right now, member states are submitting plans for this fund, and together with the EU Budget for 2021-27, it represents a significant financial package.

“When the pandemic hit earlier this year, member states initially reacted at national level. However, almost immediately it became clear that an EU coordinated response was needed to this global crisis.

“This took the form of countries helping each other with hospital capacity and personnel. In addition, joint procurement of PPE by the EU worked very effectively. Keeping borders open for essential supplies, including food, medical equipment and pharmaceuticals was also prioritised.

“Unlike the last economic crisis, European banks are better capitalised and have been part of the solution in this crisis by continuing to provide capital to businesses and citizens.

“All member states have been impacted and according to Commission figures the Irish economy will shrink by 2.3 per cent this year.”

Ms McGuinness said a Brexit deal is possible but so far it has proved difficult to achieve despite significant efforts by the EU, led by Michel Barnier.

“Deal or no deal there will be significant change for business. An agreement is the desired outcome but compromise is needed. The remaining issues of level playing field, fisheries and governance remain unsolved, despite moves on the EU side.

“As an MEP I played a part in the negotiations by ensuring that the concerns of constituents, individuals and businesses in Midlands-North-West, including Meath, were known. I engaged with business to ensure that their concerns were on the agenda.”

There are issues about the future EU-UK relationship for financial services which fall outside the scope of negotiations, and which are Commisioner McGuinness's responsibility. This includes equivalence – which allows the EU to provide improved access to the single market in particular areas of financial service by judging a non-EU country’s supervisory and regulatory regime as equivalent.

“The Commission’s equivalence assessments for the UK are ongoing. We need to know more about the UK’s future plans – the whole point of Brexit is divergence, so we need to know about where the UK is going, to assess if we can grant equivalence.

“One area where equivalence is essential is clearing, so we have adopted a time-limited equivalence decision of 18 months. This gives EU market participants the time they need to reduce their exposure to UK clearing houses.”

It has been a fairly hectic time for the former MEP since being nominated by the Taoiseach, Micheál Martin.

“Covid-19 has restricted our normal ways of working. The Commissioners meets every week respecting social distancing and mask wearing. But all other meetings and conferences are held online.” She says she was honoured to been nominated. “It is an exciting time to be a commissioner – there is a huge body of work ahead.”

McGuinness on Joe Biden...

“I THINK President-elect Biden will provide strong support for safeguarding the peace process and the Withdrawal Agreement. He is proud of his Irish heritage – including his great-great-grandfather from County Louth – and understands the issues and the benefits that US support can bring. He has spoken out on the need to protect the Good Friday Agreement in light of the Internal Market Bill. So I am glad to see that strong support for the peace process.

“Negotiations for a transatlantic free trade agreement, TTIP, ended without an agreement under the Obama administration. President Trump’s attitude to trade has been ‘America First’ which has caused some difficulties.

“We will see what President-elect Biden’s view on free trade negotiations will be – certainly we have seen that he wants to strengthen the EU-US relationship. On the other hand there is still an ongoing trade dispute over aircraft subsidies between the US and the EU at the WTO, and there are calls on both sides of the Atlantic to re-shore more production.

“My colleague Executive Vice-President Valdis Dombrovskis has said that he wants to fix disputes with the US and look for cooperative trade relations, including working together to strengthen the international rules-based order and the WTO.”