The veteran MEP Mairead McGuinness has been proposed as Ireland’s new EU commissioner, replacing Phil Hogan, who was forced to resign after breaching coronavirus lockdown rules.

McGuinness, a European parliament vice-president, would take on the portfolio of financial services, giving her a key role in overseeing access for the City of London to EU markets.

Her appointment – which has to be approved by the European parliament – is a better-than-expected result for Dublin, which lost the prestigious trade commissioner portfolio, when Hogan stood down. Ireland had expected to be relatively sidelined with a more modest job after Hogan’s departure forced an unwanted reshuffle on the European commission president, Ursula von der Leyen, only nine months into a five-year term.

Valdis Dombrovskis, one of the commission’s most senior vice-presidents, has been proposed as EU trade commissioner, which would put him in the driving seat for concluding trade talks with Australia and New Zealand, as well as often tempestuous trade relations with the US.

While trade talks with the UK are being led by the EU’s chief negotiator, Michel Barnier, the EU trade commissioner could come to the fore in any future UK-EU trade dispute. EU leaders have not decided whether to retain a special negotiator for UK-EU relations when the Brexit transition period ends at the end of the year.

The two commissioner candidates now face confirmation hearings in the European parliament. But neither is expected to encounter any problems. Both hail from the largest group in the European parliament, the centre-right European People’s party. Dombrovskis, a former prime minister of Latvia, is a two-term commissioner and former MEP.

McGuinness, an MEP since 2004, is one of the parliament’s most senior leaders. She chaired the parliamentary plenary during the last-ever session with British MEPs. On that occasion, she reproached Nigel Farage and his fellow Brexit party MEPs for waving union jacks in the chamber – a breach of parliamentary procedure. She has also taken a keen interest in Brexit talks: during the height of the gridlock at Westminster in early 2019, she urged Theresa May to appeal to moderates with a softer Brexit.

Announcing her candidacy, Von der Leyen said McGuinness had “significant political experience on EU issues” that would be crucial in carrying forward the EU financial sector policy agenda.

If confirmed, the EU executive will have a record 13 female commissioners, including Von der Leyen, and 14 men.

EU commissioners are not meant to represent their governments, but McGuinness will be an important pair of eyes and ears for Dublin in Brussels. More importantly, if confirmed, she will determine whether banks, brokers, insurers in the City of London can access EU markets, via a series of “equivalence decisions”.

The EU’s “equivalence” rules allow firms from non EU-countries, such as Switzerland and Singapore, to operate in EU financial markets, provided they respect regulatory standards to protect against risky behaviour and instability. If a country diverges from EU standards, their access to European markets can be quickly withdrawn. In 2019 Brussels cancelled equivalence for the Swiss stock exchange, following the breakdown of talks on a trade deal.

The commission is currently assessing whether to grant equivalence to firms in the City of London, a separate process to the troubled trade talks that got underway in London on Tuesday. A June deadline for equivalence decision was missed, fuelling British fears that the EU is using the process as leverage in trade talks.

Dombrovskis, who oversees EU financial regulation, told the Financial Times last month that the UK might have to wait until the end of the year to find out whether it qualified for some EU-access rights, because the bloc’s own rules are changing.