Who is Michel Barnier and what does he do?
Michel Barnier served as the EU’s Chief Negotiator for the United Kingdom Exiting the EU. This is of course more commonly known as Brexit. This led to his current title as the Head of Task Force for Relations with the UK. He is a French politician and prior to his appointment to his current position, he held a few roles in the French Cabinet dating back as far as 1993. Most notably the Minister of Foreign Affairs and Minister of the Environment. He also famously brought the 1992 Winter Olympics to his hometown of Albertville, one of the first times he showcased his capabilities. This is a feat that still receives commendation today, praising the work done by a man who passionately began politics at the young age of 15 as a Gaullist .
The UK became part of the European Communities in 1973, and hence have been a member state of the European Union since its inception in 1992. On 23 June 2016, a referendum was held, in which the UK narrowly voted to leave the EU. Just one month after the referendum in June 2016, Barnier was given his new position since he was ‘an experienced politician’ who could complete the ‘difficult job’ ahead in the words of Jean-Claude Juncker , the President of the European Commission in office at the time.
He had many responsibilities as Chief Negotiator, including:
- Representing the 27 EU states as a negotiator with the UK.
- Preparing internal ground work.
- Keeping the European Parliament closely and regularly informed.
- Remaining in contact with UK authorities and the EU states.
- Briefing the General Affairs Council on the state of play of ongoing negotiations.
- Coordinating work on Strategic, Operational, Legal and Financial issues for the negotiations.
- Drawing on support from European Commission services.
Many of these responsibilities remain the same for Barnier as Head of Task Force for Relations with the UK while the UK continues its negotiations, mainly for a trade deal. His main goals are to act as a pivot for communication between the EU and UK, whilst keeping the EU aware of any updates. Ultimately, without him the negotiations would not be able to go smoothly, nor would the EU be able to successfully promote their own needs and wants .
Barnier’s own viewpoint initially was that the negotiations would take less than the two years stated under Article 50. From this it was clear he was wishing to carry out an efficient negotiation process. In addition to this he has been tough and definitely was transparent with this from the beginning of the negotiations by highlighting that being in the EU comes with rights, which the UK would never be able to match outside of it .
He was generally in favour of prioritising the 27 EU states since he believes it is their unity that strengthens them. He wants the UK’s withdrawal to be orderly such that the impact is not huge to both parties. Despite putting the 27 EU states first, it is evident he believes the deal to be met is in the best interests of the EU too, as he himself has stated that a fair deal is ‘far better’ than no deal .
Timeline of events
A general timeline of some of the key events that Barnier has been involved in since the UK EU Membership Referendum is shown in Figure 1 . It displays some of the turbulence that has taken place in the past three years, as well as the lack of progress at times despite the ‘intense efforts’ made .
Barnier has become somewhat more of a key influencer since he became involved with Brexit Negotiations, in defiance of his already authoritative career. His position requires great responsibility and has left him in the spotlight of not just the EU, but the world as his approach, every decision and every statement are put under scrutiny and analysed. So, it comes with no surprise that he has influenced the markets in recent years.
One of the markets that Barnier has impacted the most is the Pound Sterling (GBP). The variation of the pound’s strength during Barnier’s role as Chief Negotiator is illustrated in Figure 2. His decisions and announcements have influenced whether the pound gets stronger or weaker. One way this occured was by how likely a ‘No-deal’ Brexit was portrayed to happen. If he suggested that a deal was likely the pound normally rose, with the magnitude potentially correlating to the certainty. On the contrary, prospects of a no-deal usually led to the pound falling.
One particular case in which the pound fell was when Barnier opposed the trade deal proposed by Theresa May. He suggested that the offer made on customs was ‘illegal’ and he highlighted that in the future European car manufacturers may have to reduce the quantity of British parts that they import. It is no shock that in the following days the fluctuating pound did decline slightly .
Other ways in which Barnier has affected the UK markets are by possibly influencing the UK’s inflation and the UK’s trade balance. The outcome of the negotiations will heavily determine how the UK trades with the EU. Since the referendum the trade balance has varied a lot. The only time it has recorded a surplus was with a steep rise in the run up to the March 2019 Brexit deadline, as shown in Figure 3. During this period, Barnier remained stern, stating that the EU would need reasons for an extension . By placing responsibility on the UK, it is likely Barnier could have driven the trade surplus since there was a surge in imports as companies were stockpiling with the March deadline looming.
Alongside this, the rigid position of Barnier throughout the process caused inflation to remain high because it was the uncertainty surrounding a no-deal Brexit that harmed the pound. The Consumer price index (CPI) had remained above the 2% target set by the Bank of England for a while, as shown in Figure 3. This increased the cost of living and from a purely economic point of view this would have had a knock on effect on consumer confidence and domestic spending. Taking this into account, it is evident the stance Barnier takes has a direct effect on the behaviour of people, companies and the markets.
Barnier himself can have busy weeks in which his announcements see-saw. At the start of one week it seemed as though Brexit negotiations were on the verge of collapsing as Barnier blamed Boris Johnson for a no-deal Brexit . Later that week Barnier said that a Brexit deal was ‘very difficult but [still] possible’ in contrast to the chaos of the days before this .
To add to this, the progress appeared to continue with Barnier labelling the negotiation process ‘like climbing a mountain’ in October 2019 . The patient and optimistic attitude of Barnier was met with a steep rise in the pound. It increased by 3% in two days against the Euro, the largest growth it had experienced since the referendum . This also corresponded to a three month high. Barnier’s resilience and new found patience in the negotiations restored some confidence in the pound.
Building on from Barnier’s important roles, there have been speculations suggesting that the Frenchman may one day push to become the President of the European Commission or President of France , which certainly imply he may become even more influential in the future. He has the backing of many other key figures in Europe, such as Emmanuel Macron. Michel Barnier’s future movements are definitely ones to follow over the next few years. However, for now, it is Brexit that is at hand and with the possibility of the transition period being extended by up to one or two years, his role negotiating and maintaining relations with the UK could go on much longer than anyone ever expected.
Final year university student, finishing my undergraduate studies in Physics at Imperial College London.