15/09/2024

Dispatch from Brussels: August 2024

EU Commission puzzle  

The forthcoming composition of the European Commission, led by Ursula von der Leyen’s European People’s Party (EPP), is anticipated to consolidate EPP influence over key portfolios, to the dismay of socialist and liberal factions. Specifically, pivotal portfolios such as employment and housing, which were coveted by the center-left socialists, are likely to fall under EPP control. It is expected that Austria’s Magnus Brunner and Croatia’s Dubravka Šuica, both affiliated with the EPP, will assume leadership in these areas, with Brunner possibly overseeing the highly influential competition portfolio. While von der Leyen’s reappointment was secured with the support of socialists and liberals, her continued leadership will require their backing during the formal approval process for the new Commission. Pedro Sánchez, leader of the Socialist Party, has successfully positioned Teresa Ribera for the role of Executive Vice President for the Digital Green Transition. However, other socialist nominees are projected to receive less prominent roles, with Malta’s Glenn Micallef likely to be assigned a minor portfolio and Romania’s Roxana Mînzatu potentially obtaining an economic portfolio. The liberals, on the other hand, are expected to secure portfolios relating to home affairs, financial services, and other economic portfolios. Nevertheless, von der Leyen is advocating for gender parity, urging member states to nominate female candidates where possible. Notably, three executive vice presidencies are predicted to be allocated to France, Italy, and Spain. France’s Thierry Breton is projected to oversee Industry and Strategic Autonomy, while Italy’s Raffaele Fitto may manage the Economy and Post-Pandemic Recovery. Additionally, the EPP is set to retain control over powerful portfolios, including those related to competitiveness, trade, and security. Portfolios concerning energy and agriculture are also expected to remain under EPP leadership. However, Hungary’s Oliver Varhelyi may face replacement due to opposition within the European Parliament. The official announcement of these portfolios is scheduled for next Wednesday. Despite the European Commission’s professed commitment to diversity and inclusion, it has encountered criticism for its lack of gender and ethnic representation. Out of the 27 nominated commissioners, only one individual, Hadja Labib of Belgian-Algerian heritage, represents an ethnic minority. Labib is notable as the first EU Commissioner-designate with a non-EU background, although not the first minority member of the Commission. The European Network Against Racism (ENAR) welcomed Labib’s nomination but underscored the insufficiency of mere representation without substantive mechanisms for racialized communities’ participation in EU policymaking. ENAR has called for systemic changes to address the ongoing underrepresentation of racial and ethnic minorities, who constitute at least 10% of the EU’s population, yet remain marginalized in both the European Commission and the European Parliament. A 2021 Commission survey highlighted that only 7.3% of its workforce identifies as ethnic minorities, and these individuals reported lower levels of satisfaction regarding their inclusion compared to their counterparts. The Commission’s 2023-2024 Action Plan outlines objectives aimed at increasing ethnic minority representation within its staff, thereby ensuring that the Commission more accurately reflects Europe’s demographic diversity. Prominent civil society organizations, including Amnesty International and Human Rights Watch, have also called for a greater emphasis on equality and non-discrimination in the Commission’s agenda. These organizations advocate for the establishment of a Commissioner for Equality and Fundamental Rights, which would further prioritize the Union of Equality initiative. Gender balance remains another pressing concern, with only nine of the current 27 nominees being women. In response, Commission President von der Leyen has urged member states to submit both male and female candidates, in line with the Commission’s goal of achieving gender parity, a key objective for its 2019-2024 mandate. Von der Leyen is in the process of finalizing her new European Commission, which is set to be unveiled in the coming week. A report from Die Welt confirmed many of the previously speculated appointments. In this iteration of the Commission, von der Leyen is expected to surround herself with executive vice presidents from major member states, including France, Italy, and Spain. Furthermore, she aims to cultivate a new image, characterized by increased transparency and more frequent press conferences, which contrasts sharply with her first term, during which she was seldom seen engaging directly with the media. A significant challenge for von der Leyen will be fostering collegiality within the new Commission, a point of contention during her first term. Her centralized approach to decision-making, compounded by the considerable influence wielded by her chief of staff, led to tensions and dissatisfaction among several commissioners. These issues came to the fore during the “PieperGate” controversy, which involved the appointment of a CDU politician as the EU’s Small and Medium-sized Enterprises (SME) envoy and sparked open criticism of von der Leyen’s leadership style. The introduction of additional executive vice presidents in this new structure could signal a shift towards more collaborative governance, especially among commissioners from major member states. Among the key appointments, France’s Thierry Breton is likely to be entrusted with Industry and Strategic Autonomy, Spain’s Teresa Ribera with the climate and digital transitions, and Italy’s Raffaele Fitto with the Recovery Plan and Economic Affairs. This allocation of portfolios is seen as a potential effort to appease Italy’s Prime Minister, Giorgia Meloni. Additionally, Latvia’s Valdis Dombrovskis is expected to continue in his role as Executive Vice President, with responsibility for overseeing Ukraine’s reconstruction and EU enlargement. Nonetheless, concerns have emerged within the European Parliament regarding the structure proposed by von der Leyen. Critics have suggested that the new configuration may be overly hierarchical, and some have expressed disquiet about the absence of a vice president dedicated to critical issues such as the rule of law and migration. One parliamentary source voiced apprehension that despite the creation of additional vice-presidential roles, final decision-making power may remain concentrated in von der Leyen’s office. Consequently, some fear that her second term may replicate the centralized governance style that characterized her first.

Mario Draghi report to the EU

Former Council and ECB President Mario Draghi presented on September 9th his 400-page report on competitiveness in Brussels. The report “The future of European competitiveness” outlines a comprehensive strategy to boost European competitiveness in the face of significant challenges. It identifies three key areas for action: closing the innovation gap, particularly in digital technologies; implementing a joint plan for decarbonization and competitiveness; and increasing security while reducing strategic dependencies. The report recommends major reforms to EU R&D programs, completion of the Single Market, lowering energy costs while accelerating the clean energy transition, developing domestic capacity in critical technologies and materials, and strengthening EU defense and space industries. To finance these initiatives, it proposes mobilizing both public and private investment through developing EU capital markets, reforming the EU budget, and potentially issuing common EU debt for key investments. Crucially, the report argues for strengthening EU governance by establishing a new Competitiveness Coordination Framework, extending qualified majority voting, and simplifying regulations. The overarching goal is to boost EU productivity and competitiveness while maintaining social inclusion and sustainability, requiring a coordinated strategy across multiple policy areas. This ambitious plan aims to position Europe as a global leader in innovation, clean technology, and strategic autonomy in the coming decades.

Ursula von der Leyen seems to be intent on establishing this as the overarching principle of her forthcoming Commission, incorporating elements of it into the mission statements defining the remit of the new Commissioners. In particular, von der Leyen emphasizes the Commission’s support for green technologies, skills development, and strengthening industrial supply chains. It would appear that the majority of political parties are in support of the proposals put forth by the former Italian Prime Minister to stimulate the somewhat anemic growth of the EU. Mario Draghi’s proposals to stimulate the EU’s subdued economic growth have received favorable comments from some key MEPs, although not all have expressed unreserved support.

French government and German election

In recent state elections, Alternative for Germany (AfD) party achieved a historic milestone by capturing a third of the votes in Thuringia and Saxony, marking the first time since the Nazi era that a far-right party has won so decisively. This surge in support reflects growing dissatisfaction among residents in Erfurt, where safety concerns exacerbated by recent knife crimes and a high-profile ISIS attack influenced their vote. Political observers have noted a shift towards populism in Germany, mirroring trends across Europe. The established parties in Thuringia struggled to secure a majority, presenting the AfD with potential coalition opportunities either with the far-left Sahra Wagenknecht Alliance (BSW) or the conservative CDU. However, the CDU has ruled out collaboration with the AfD, and Wagenknecht has also rejected any coalition with the far-right. This leaves the CDU with the complex task of forming an alliance with BSW and the SPD, though this coalition might still fall short of a majority. In Saxony, the CDU must align with BSW due to insufficient support from previous partners. BSW, a nascent party with limited members, faces challenges in establishing a stable government and may need to consider appointing non-party ministers to function effectively. Despite whether the AfD joins the government, their influence could push other parties to adopt stricter policies on issues like immigration, similar to how the Greens’ focus on environmental issues reshaped political discourse in the past. Meanwhile, the FDP party experienced significant losses due to their divisive tactics, highlighting the need for internal reform. In France, President Emmanuel Macron has appointed Michel Barnier as the new prime minister, a move that grants significant influence on the far-right National Rally. With the National Rally finishing third in the recent snap election, Barnier’s government depends on their support to avoid being toppled. The left-wing New Popular Front, which won the most seats but fell short of a majority, has pledged to back no-confidence motions against Barnier. To secure National Rally support, Barnier will need to address their demands, including measures on purchasing power, security, immigration, and proportional representation in Parliament. The 142 National Rally lawmakers are a crucial factor in this negotiation. Marine Le Pen’s influence was significant in the prime ministerial selection, leading to Barnier being chosen over conservative Xavier Bertrand, who faced outright rejection from the National Rally. Barnier now faces the challenge of balancing the interests of his center-right and centrist supporters with the far-right’s demands, particularly around budget cuts. Macron’s decision to engage with the far right has caused unease among his allies, who feel it contradicts his earlier stance against extremist elements. Nonetheless, Macron’s choice reflects a pragmatic approach aimed at maintaining government stability amid a fragmented National Assembly.

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