Financial services role goes to Albuquerque ― but she brings baggage

BRUSSELS ― Maria Luís Albuquerque, who has been selected to oversee financial services in the new European Commission, has a mixed reputation at home.

The Portuguese lawmaker was a surprise victor in the brawl for the role, seeing off competition from finance ministers from Ireland and Austria.

For Portuguese citizens, Albuquerque is synonymous with harsh economic austerity. As the country’s finance minister between 2013 and 2015, the economist oversaw the dramatic public spending cuts that were a condition of the bailout offered by the so-called Troika of the country’s international creditors in the wake of the debt crisis.

During her tenure, Albuquerque gained a reputation for being a serious, sometimes severe figure. She earned the respect of many in Brussels by endeavoring to pay off loans early, cementing Portugal’s reputation as the “good pupil” determined to make sacrifices to keep its promises with the European Union and global financial institutions.

But back home, many of her compatriots resented her devotion to brutal realism, exemplified by her insistence on telling citizens not to expect any “miraculous” recovery of the country’s economy.

Her nomination for the financial services portfolio will likely garner a mixed reception with lawmakers, paving the way for a tough confirmatory hearing in the European Parliament. NGO Corporate Europe Observatory said she has a “worrying revolving door history” because of her move from Portugal’s Finance Ministry in 2015 to London-based finance firm Arrow Global. She most recently worked at the European arm of United States lender Morgan Stanley.

Albuquerque also oversaw the costly 2014 government bailout of Banco Espírito Santo, Portugal’s second-largest lender.

When she appears before the Parliament she’s likely to be grilled by MEPs over her role in the 2015 sale of Portuguese state-owned flagship airline TAP, which took place while former Prime Minister Pedro Passos Coelho’s government was in caretaker mode. Recent revelations have raised questions about the process.

Failed bid

Albuquerque also has a history with the EU’s fruitless efforts to build deeper capital markets.

She was among the leaders of a panel at the start of the last Commission five years ago to push for a central financial watchdog — without success.

And she also ran to become the chair of the European Securities and Markets Authority in 2021, but lost out in a distant third place to current chair Verena Ross.

If her popularity among the public is mixed, she’ll likely be more of a hit with the civil servants leading work on financial services regulation. When the Troika was dealing with Portugal, she worked with the Commission’s John Berrigan, now the top civil servant in the financial services department, and the two are said to have a good relationship. Berrigan told POLITICO on Tuesday that Albuquerque is “very good” but said they had not yet spoken in her new capacity as commissioner-designate.

Decade-old slight

She was widely expected to be nominated as Portugal’s commissioner in 2014, but after then-Commission President Jean-Claude Juncker informed Lisbon the country was not in line for a major portfolio, Carlos Moedas was sent instead. Her nomination this time around was seen as center-right Prime Minister Luís Montenegro’s way of rectifying the slight committed 10 years ago.

The Portuguese commissioner-designate will inherit a role which has evolved significantly in the last five years.

She will oversee work on the EU’s single market for investment, alternately branded the Capital Markets Union or Savings and Investment Union.

It is a decade-old project that has risen to prominence recently as the EU searches for growth to catch up to the U.S. and China, and funding for the green and digital transitions and defense.

But it is unlikely that the role will involve proposing as much new legislation as in the last mandate, which was dominated by major proposals on bank capital and crisis management preparedness, markets reform, and steering the EU’s financial services sector through the disruption of Brexit.

The Commission is expected to focus on implementation this mandate with a more limited menu of new legal texts to put forward.

Hannah Brenton in London also contributed to this article.