European Commission

Beating the Competition

It's no TV show. Source: Reuters
It's no TV show.
  • Why it matters

    Why it matters

    Ms. Vestager’s competition portfolio puts her in a position to make decisions affecting companies from Google to Gazprom.

  • Facts

    Facts

    • The lifelong politician is known to build bridges among colleagues with differing ideologies.
    • Her party is considered centrist-liberal in the classic free-market sense of liberalism.
    • She inspired the character Brigitte Nyborg in the series “Borgen.”
  • Audio

    Audio

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Margrethe Vestager’s hunt for a new home in Brussels has opened her eyes to how many of her new European Union colleagues live.

“When we went in the basement the realtors pointed out rooms and recommended that they could be for servants,” said Ms. Vestager, looking appalled.

The anecdote says something about the real estate market in Brussels, where investors easily re-label basements as living space, and hope to win diplomats as clients. But it says much more about a woman who has reached the highest levels of politics in Denmark and is shedding the image she once had as a coldhearted welfare-cutting politician. Ms. Vestager is showing her human, more personal side. But she still pursues her goals with great determination.

As deputy prime minister in Denmark, she regularly led the ranking of the most influential politicians. When she had the top post at the Danish opposition Social Liberal party, Radikale Venstre, from 2007 to 2011, the Danish public was so fascinated by her that she helped inspire the successful political series “Borgen.”

The mother of three daughters, aged 11, 15 and 18, has been handed one of the most important posts in the new E.U. Commission under President Jean-Claude Juncker. As the commissioner for competition, she can levy anti-trust fines in the billions, bar mergers, and rap the knuckles of member states when they distribute illegal subsidies. Her upcoming decision on the case of Google, which she inherited from her predecessor Joaquín Almunia, will constitute Europe’s answer to the supremacy of the U.S. Internet giant. It will depend on her whether or not Europe closes tax loopholes that companies like Apple and Starbucks have taken advantage of in countries like Luxembourg.

Ms. Vestager is taking on a long list of complex cases from her predecessor, including the Google case, and a politically sensitive investigation against Gazprom regarding the possible manipulation of gas prices.

Those who know Ms. Vestager say she is ideally suited for the post. “She is a godsend,” said a high-ranking E.U. bureaucrat, who had worked closely with her when she was the Danish economy minister. She took over that post in October 2011, after she had been education minister in 1998 at the age of 29. Never before had there been a younger member of the Danish cabinet.

On her second day on the job as economy minister there was a meeting in Brussels of the Economic And Financial Affairs Council, or Ecofin. When, three months later, she took over the chairmanship of the Danish Presidency of the European Union, her good preparation and her ability to build bridges attracted attention. “She negotiated between adversaries and did not fixate on ideology,” said a source in Brussels. She rose out of the masses of her colleagues, very few of whom were women, through her charm. “She knows its effect and uses it in a targeted way,” said a man who knew her. “There is always a reason she is doing something.”

During her time at Ecofin she became interested in a post in Brussels. When it became clear that the Danish head of government, Helle Thorning-Schmidt was not interested in going to Brussels, this was Ms. Vestager’s chance. After Mr. Juncker announced that he wanted to put women in important positions, it was clear that the trained economist would get an influential post.

Ms. Vestager is taking on a long list of complex cases from her predecessor, including the Google case, and a politically sensitive investigation against Gazprom regarding the possible manipulation of gas prices. Ms. Vestager is assuming the post with a certain sense of modesty: “You shouldn’t be aiming to revolutionize European competition policies.”

It should be easy for her to distinguish herself because neither of her two predecessors left behind a brilliant record. The Dutch politician Neelie Kroes persistently leaned on Microsoft, but never gave the impression that the topic of competition really interested her intellectually. The Spanish economist Mr. Almunia was so prone to garrulity that the E.U. ombudsman is now investigating statements he made during the pending proceedings involving Euribor. His political changes of course demotivated his employees and made the Commission look bad, and not just in the case of Google. Ms. Vestager understood what is expected from her from her Directorate-General, the host of Brussels competition lawyers, and the public. She now says things such as: “Predictability is in high demand when it comes to decisions on competition.”

She appeared confident at her confirmation hearing at the European Parliament. She routinely answered the members’ questions but refrained, when in doubt, from saying too much. That also showed her experience as a politician.

In her new job she will often have to be tough, in order to evade the pressure from the companies and governments. “She is not afraid of saying no,” said her biographer Elisabet Svane.

Kisses from Jean-Claude - for now. Source: AP
Kisses from Jean-Claude – for now. Source: AP

 

There are conflicts expected in the beginning of her time in office, including with the head of the European Commission, Mr. Juncker. The tax loopholes in Luxembourg date to when he was prime minister in the country. It is not to be expected that he will support her attempts to be tough in going after the tax privileges.

She is also headed for a collision with Mr. Juncker and Digital Commissioner Günther Oettinger over digital markets, which Ms. Vestager has explicitly named as a priority. During the campaign, Mr. Juncker called for a rethink on competition rules, to make, for example, mergers in the telecommunications industry possible. And Mr. Oettinger likes to emphasize that Europe is lacking the biggest players in the industry. Ms. Vestager doesn’t think much of this type of industrial policy that protects businesses at the costs of consumers. Her credo is: “The best ways to prepare for competition abroad is being competitive at home.”

Ms. Vestager got her classically liberal attitude from her parents, both of whom are pastors and members of Radikale Venstre. At the age of 25, Ms. Vestager, then a bureaucrat at the Finance Ministry, tried for the first time to be elected to parliament with a hopeless spot far down on the party list. But trying to convince others of her points of view was so much fun that a career in politics was born. Party leader Marianne Jelved took her under her wing early on and seven years ago Ms. Vestager took over as her party’s parliamentary group leader, which she gave up with her move to Brussels.

She helped her party – which had lost its role as king maker in Danish politics, and suffered with the split with its right-wing – regain new power. In 2011, the Social Liberals came to power as a small coalition partner of the Social Democrats. As the Economy Minister, she pushed through a measure shortening the term for unemployment benefits from four to two years. And when she was still in the opposition, she was a driving force for the reform of early retirement. She considers the role of the state to be helping people to help themselves. The steadiness in which she pursued her goals brought her admiration and dislike in equal measure. “Danes either like her or oppose her, there is no in-between,” said biographer Ms. Svane.

Ms. Vestager cleverly used the Internet message service Twitter to present herself as being in touch with the times. Before she left Copenhagen, she baked cookies for her staff at the party headquarters. Online you can also read about her nights on the sofa with her husband and daughters in front of the TV. Her husband, Thomas Jensen, will soon pursue his job in Brussels – he teaches mathematics and philosophy over the Internet.

Friends in her party have denied that she served as the model for the character of Brigitte Nyborg in the successful Danish TV show “Borgen.” But the parallels are not coincidental. The lead actress Sidse Babett Knudsen followed Ms. Vestager in order to prepare for her role. Ms. Vestager enjoyed how the show turned out, and considers the portrayal of everyday politics to be accurate, with one exception. “They lack the many long-winded meetings,” she said.

 

This article originally appeared in WirtschaftsWoche. To contact the author: silke.wettach@wiwo.de

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