Juncker’s proposed Commission includes two surprises

The two most surprising things about the proposed college of commissioners presented by Jean-Claude Juncker on September 10th and to take office–if endorsed by the European Parliament–0n November 1st, are: first, its structure, a structure which is likely to have consequences for not only the internal working of the Commission but how it appears to the outside world; and second, how far the appointments go to meeting British aims (of which the appointment of the British commissioner, Lord Hill, to be responsible for financial services, is only one aspect).

 

New structure aims to remove silo-mentalities

Mr Juncker has said that it is intended to remove “silo-mentalities” and at least for some aspects of the Commission’s work this is likely to be the case. Apart from the foreign policy representative much of whose work is outside that of the Commission, and Kristilina Georgieva, who is to become vice-president for budget and human resources, there will be five other vice-presidents who, unlike previous vice-presidents who usually had major portfolios, will not have specific departmental responsibilities but instead will be tasked with co-ordinating policy under different, but overlapping fields, namely:

Better Regulation—Frans Timmermans (outgoing Netherlands foreign minister);

The Digital Single Market—Andrus Ansip (resigned in March 2014 after nine years as prime minister of Estonia);

Energy Union—Alenka Bratusek (was  forced to resign in May 2014 as prime minister of Slovenia after 13 months in the post);

The Euro and Social Dialogue—Valdis Dombrovskis (resigned after five years as prime minister of Latvia in November 2013); and

Jobs, Growth, Investment and Competitiveness—Jyrki Katainen (resigned as prime minister of Finland in June 2014 after three years in office to join Commission).

Each of the above will be asked to coordinate the work of several of the other commissioners who do have specific departments (Directorates-General). Given that four of the five co-ordinating commissioners are former prime ministers, all who have chosen to leave active careers in domestic politics to make contributions at the EU level, it can be expected that they will want to wield power and in so doing are likely to cause tensions or even come into open conflict with the commissioners they are supervising. In particular, Mr Katainen who decided to step down as prime minister of Finland to go to the Commission, and Mr Dombrovskis will expect to have a major influence on economic policy matters in the euro zone. As they both have been associated with fiscal discipline in their own countries and, in the case of Mr Katainen with regard to other euro zone countries, they are likely to come into conflict with Pierre Moscovici, the former Socialist French finance minister, who judged by his past record will want to emphasise a “flexible” interpretation of the euro zone’s fiscal rules. Both Mr Katainen and Mr Dombrovskis will also have a strong interest in the employment portfolio which will be taken by Marianne Thyssen, A Belgian Christian Democrat.

Other policy domains where tensions are likely include: the controversial energy field between Ms Bratusek and Miguel Arias Canete, the Spanish commissioner who will be in charge of DG Climate Action and DG Energy; and the digital economy between Ansip and Gunther Oettinger, the German outgoing energy commissioner who will take charge of DG for Communications Networks, Content and Technology and DG Informatics.

 

Hopes for drive for better regulation enhanced by choice of Timmermans

Two key players operating hopefully with a reasonable degree of harmony will be Mr Timmermans in charge of co-ordinating policy related  Better Regulation,as well as the Rule of Law and Charter of Fundamental Rights, and Elzbieta Bienkowska in charge of the departments for the internal market, industry, entrepreneurship and SMEs. The EU is held together largely by its body of legislation, and the majority of that legislation is designed to facilitate the internal market. The legislation attracts much criticism for its allegedly onerous and intrusive impact on businesses.  If one were to judge by almost all the examples given in the UK’s tabloid press of such excess, the criticism would appear to be largely based on inaccurate reporting. However, given the fact that the legislative acquis over 60 years has reached 100,000 pages it would indeed seem likely that there is huge scope for streamlining and where appropriate eliminating legislation with the aim of reducing regulation to the minimum necessary to achieve the key objective of free movement while safeguarding the health and safety of workers and consumers maintaining environmental standards and saving energy.

In a speech as the Netherlands foreign minister in February 2014 Mr Timmermans said that “the European Union needs to be modest and understand that there is no Union without the member states…The EU exists by the grace of the member states and their democratic institutions. The EU would do well to secure greater involvement in Brussels decision-making by those democratic institutions, governments and parliaments.

We are making proposals to bolster the role of national parliaments, and favour a smaller European Commission focusing on core tasks.”

On the basis of this and other declarations, we can expect that Mr Timmermans will launch a drive to improve the quality of regulation and to steer it away from activity in areas, which are not the EU’s core tasks, such as the internal market and legislation to protect the environment. He should be able to work closely with Ms Bienkowska who, having been deputy prime in the present centre-right government in Poland, is likely to have similar ideas to Mr Timmermans and want to meet the legitimate calls of the British government, with which Poland has a good and close rapport, for reform. She will no doubt retain close relations with Donald Tusk, the outgoing prime minister of Poland under whom she has served, who is also on Noevember 1st, to become president of the European Council, representing heads of government. Mr Tusk has stated that the task of trying to prevent the UK leaving the EU is one of his three top priorities along with resolving the conflict between Ukraine and Russia and reviving the EU economy.

Mr Timmermans and Ms Bienkowska will not be able to deal with everything the UK wants to change. The 48-hour week (although it is not in practice applied) and other pieces of social legislation are disliked by the UK Conservatives but their abolition would be politically controversial in other countries, and will therefore have to be dealt with in the European Council not the Commission, as will UK requests for treaty changes. It may well, however, be possible to make substantial changes to reduce the impact of EU regulation without major political controversy.

 

Can next Commission revive the euro zone economy?

Reforms to EU regulation are highly important to the UK, the Netherlands and some other countries in northern Europe, but are of little interest in France or southern Europe, where all the concern is on what can be done to revive the euro zone economy. As discussed above, the allocation of posts should lead to a lively debate within the next Commission and it would not necessarily be a bad thing if such debate proves to be reported rather than interpreting collective responsibility to strictly.

However, whether the Commission can actually do very much on its own to stimulate the euro zone economy is open to doubt. There will be a lot of debate over what degree of flexibility can be allowed in relation to the constraints on budget deficits given the weak state of many euro zone countries’ economies, but realistically the scope for such flexibility without driving a coach and horses through both the letter and spirit of the Maastricht Treaty which would not be tolerated by Germany, the Netherlands of Finland, is little more than marginal. Something may be achieved by promoting an EU-wide public sector investment programme as proposed by Mr Juncker with extra funding achieved by expanding the European Investment Bank, but the size of such a programme will still be modest. The best hope would be to help support the European Central Bank’s moves to make more money available to banks that on-lend to businesses and to purchase Asset-Backed Securities consisting of investments in businesses, for example by directing EU regional funds towards grants and loans to small and medium enterprises and putting pressure on government to remove administrative obstacles to business start-ups and expansion which in some countries like Italy remain substantial. That could in turn link back with any Commission drive to improve EU regulation, which could be combined with pressure on member states’ administrations to implement EU directives (which leave large scope for national interpretation) in a simple and efficient way.