Juncker Who?

Merkel Won't Be Fazed by E.U. Appointments Snub

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I've decided to put off my German vacation.
  • Why it matters

    Why it matters

    The new European Commission is unlikely to persuade Germans that the E.U. is prepared to tackle its core problems. Chancellor Merkel knows the real power lies in Berlin not Brussels.

  • Facts

    Facts

    • Germany did not get a top job in the European Commission, but a digital economy post.
    • Jean-Claude Juncker appointed a euro-skeptic Brit and a French Socialist to economic jobs.
    • Mr. Juncker has demanded commissioners put Europe before nationalist priorities.
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    Audio

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A united Europe remains the best thing European states have done in the last 100 years.

The new makeup of the European Union Commission doesn’t change that, although the team assembled by the incoming president, Jean-Claude Juncker, suggests the promise of more freedom and prosperity across the continent may not be its guiding light.

Mr. Juncker has named a prominent British conservative and euro-skeptic, Jonathan Hill, to oversee financial policy, and Pierre Moscovici of the Socialist Party in France, as economic affairs chief, even though his nation will no longer comply with the stability criteria set down by the European Union until 2017. It looks like a commission for a weak currency.

Germany, which boasts Europe’s largest economy, is left with responsibilty for the digital economy. While that is a position with a future, it doesn’t compare to the key positions that wield power today.

There are two explanations for this turn of events: Either Germany reverted to its traditional role of bowing to the will of others during negotiations, or Chancellor Angela Merkel is convinced she ultimately calls the shots in the E.U.

When U.S. President Barack Obama wants to clarify something with Europe, he doesn’t call Brussels. He calls Ms. Merkel. Vladimir Putin, the president of Russia, does the same thing. That Ms. Merkel didn’t put up much of a fight to secure a more prominent role on the commission for Günther Oettinger speaks for itself.

When presenting his new commission this week, Mr. Juncker spoke of a “credibility crisis” within the European Union, which continues to confront a wide range of vexing economic issues, particularly in southern Europe. As the official overseeing currency issues, Mr. Moscovici will need to be seen to take a hard line if he doesn’t want to be seen as soft on the currency issue. His actions will have a profound impact on France, which has been struggling to comply with the E.U. mandated debt ceiling.

When U.S. President Barack Obama wants something done with Europe, he doesn’t call Brussels. He calls Ms. Merkel. Vladimir Putin, the president of Russia, does the same thing.

As France’s finance minister, Mr. Moscovici was successful in negotiating a two year-extension for his country with the European Union on meeting deficit rules.  But now, he can no longer avoid the touchy and unpopular subject of an exploding deficit at home, the need for economic reform in Greece and the difficulties involved in saving the euro.

German government sources say officials are keeping a close eye on Mr. Moscovici. In Brussels, he will work under Valdis Dombrovskis, a Latvian who is vice president for the euro, and who presumably would intervene if the Frenchman were to push for soft currency policies. But that is little consolation for now.

People in Germany, particularly the performance-minded small-and-medium-sized businesses, can’t be fooled when it comes to the mountain of debt incurred by E.U. member states. Like a seismograph, they register even the slightest attempt to soften deficit regulations. The old guard in Brussels and the former commission president, José Manuel Barroso, were unable to alleviate these fears despite their forecast for a stable euro combined with more growth and jobs.

The new finance commissioner, Mr. Hill, who has publicly lobbied for reducing the authority of E.U. institutions, cannot expect to inspire much confidence. British Prime Minister David Cameron conceded openly that Mr. Hill will push his ideas for E.U. reform with an eye toward favoring Great Britain.

If Mr. Cameron is re-elected next year then Britons will vote in a referendum in 2017 on whether or not to remain in the European Union and Mr. Cameron fought to the end to prevent Mr. Juncker from assuming the presidency of the commission. It’s anyone’s guess what Mr. Hill brings to the job.

Now Mr. Juncker must prove he can keep the commissioners on a tight rein. He gave notice that vice presidents, as well as commissioners, will be asked to change positions within the commission if he gets the impression they are confusing national politics with European policies. Although that’s an honorable and responsible course, it still isn’t reassuring.

Think back to the night of the European Parliament elections at the end of May. Germans almost couldn’t have cared less about Europe, which meant voter turnout was humiliatingly low, despite important issues like the spying scandal of the U.S. National Security Administration, free trade with the United States and an ugly war in eastern Ukraine. With such a slight turnout, euro-skeptic parties like the Alternative for Germany and France’s National Front rolled to landslide victories.

That’s why “confidence” is the byword in Brussels these days. All parties want to see confidence in E.U. institutions restored, but the Germans will largely be scratching their heads when they read the list of newly appointed E.U. commissioners. Those names won’t build confidence here, though the concept of a united Europe remains unshaken.

This article was translated by David Andersen. Jeff Borden also contributed to this story. To reach the author: sigmund@handelsblatt.com

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