Tusk and Mogherini: Europe's new 'dream team'? Our initial thoughts

Europe's new 'dream team'?

As we noted in our previous post, Cypriot President Nicos Anastasiades had sort of spoiled the surprise. Anyway, now it's official: Polish Prime Minister Donald Tusk has been appointed new European Council President, and Italian Foreign Minister Federica Mogherini will succeed Baroness Ashton as the EU's foreign policy chief (aka High Representative for Foreign Affairs).

A couple of initial thoughts:
  
Donald Tusk 

Tusk has economically liberal and pro-free trade instincts. Most importantly from the UK's point of view, he comes from outside the euro area - and will therefore be sensitive to the concerns of non-euro countries when it comes to safeguarding the integrity of the single market, a point he made during his press conference:

#Tusk We've need to prevent Europe from dividing into euro/non-euro camps, I wouldn't have taken job if it involved new institutional split
— Pawel Swidlicki (@pswidlicki) August 30, 2014

Tusk also explicitly committed himself to ensuring the UK stays in the EU and endorsing (some) EU reforms:

#Tusk: We'll need solutions to the concerns of Great Britain, no one sensible can envisage the "black scenario" of an EU without Britain
— Pawel Swidlicki (@pswidlicki) August 30, 2014

That said, Tusk is also likely to oppose fundamental changes to EU rules on free movement; although he did say that so-called 'welfare abuse' can be addressed, as we've noted, for many the debate has moved on from the issue of 'fairness' to that of 'volume', something Cameron will be under huge pressure to place at the centre of his potential renegotiation. In the more immediate future, Cameron's early support for Tusk as new European Council President could increase the UK's chances of securing a big portfolio in the new European Commission.

Significantly, it has been confirmed that Tusk will also chair the summits of eurozone leaders - despite coming from a non-euro country. This looks like a big concession made, in particular, by French President François Hollande - who was reportedly sceptical of such an arrangement. Perhaps Hollande hopes that giving ground on this point can help him secure the key post of European Commissioner for Economic and Monetary Affairs for his former Finance Minister Pierre Moscovici.

Federica Mogherini

The resistance to Mogherini, put up by Eastern EU member states over the past few weeks, has clearly been appeased by Tusk's appointment as new European Council President. It was noteworthy that Herman Van Rompuy stressed that Tusk and Mogherini would "work closely together to secure Europe's interests and values".  

Italian Prime Minister Matteo Renzi, who has invested a great deal of political capital on Mogherini, seems to have achieved what he was looking for: a diplomatic victory in Brussels to sell to the electorate once back in Italy - where the big reforms are not going forward as fast as announcements, and the economic situation shows no signs of improvement. With the country in recession and deflation, it remains to be seen how much Italian voters will be impressed.

#Mogherini lands High Rep job, #Renzi scores EU victory to sell back at home. Not sure how much Italians will be impressed. #EUCO #EUtopjobs
— Vincenzo Scarpetta (@LondonerVince) August 30, 2014

As we noted in our recent flash analysis, the role of High Representative is less crucial from the UK's point of view - as foreign policy remains primarily a national competence, with every EU member state having a veto. However, in light of the various geopolitical challenges facing the EU (and its neighbourhood), it is possible that Mogherini will play a greater - or at least more visible - role than her predecessor.

"I understand that Tusk it's OK": Has the Cypriot President just spoiled it all?

As we wrote in our round-up of EU leaders' doorsteps, Polish Prime Minister Donald Tusk is the favourite for the European Council President post but it was not yet a done deal. However, have we just inadvertently had confirmation that Tusk has landed the job?

Watch this video from around 16:30 in:



Cypriot President Nicos Anastasiades tells outgoing European Council President Herman Van Rompuy:

"We have news, I understand that Donald [Tusk] it's okay."

And Van Rompuy replies:

"Yes, but keep it."

That sounds like a bit of a spoiler, but we will keep following the summit and provide you with real-time updates on Twitter just in case there are any last minute surprises.

EU top jobs: will Matteo Renzi and Mrs. Tusk get their way?

Herman waves goodbye to the European
Council Presidency - who will succeed him?

As we laid out in our flash analysis yesterday, the outcome of tomorrow's EU 'top jobs' summit is looking increasingly predictable. Italian Prime Minister Matteo Renzi's efforts to force his Foreign Minister Federica Mogherini into the High Representative post look set to pay off (with Merkel deciding to keep her powder dry for the almighty scrap over the Economic and Monetary Affairs portfolio). Spanish Europe Minister Íñigo Méndez de Vigo this morning tweeted that Mogherini is the "clear favourite" to take over from Baroness Ashton.

Hence, the flip side of the High Representative post going to the relatively dovish Italy seems to be the European Council President post going to a Central and Eastern European member state, with Poland's Donald Tusk (who has been officially endorsed by David Cameron), Latvia's Valdis Dombrovskis and Estonia's Andrus Ansip all in the mix. Tusk himself is staying tight-lipped, with the Polish government's spokeswoman this morning claiming that he had not yet made up his mind - a notable change of emphasis from Tusk's previous outright denials. Somewhat amusingly, Gazeta Wyborcza reports that the person responsible for potentially changing the Polish Prime Minister's mind is...his wife. Mrs Tusk allegedly thinks the post will mean "[more] prestige, [more] money and less pressure."

Of course, with it being the EU, a last minute surprise cannot be completely ruled out, and as in 2009 we could end up with some completely unexpected names that had not been on the radar. However, given the severity of developments in Ukraine - and also in the Middle East - there will be pressure on EU leaders to take concrete measures instead of wrangling about personalities.

EU leaders will also debate the allocation of key posts within the Commission, and Cameron will be pushing for the UK nominee Lord Hill to get an important economic post like internal market or competition, although these are not set to be announced at least until September 8th.

To follow tomorrow's developments live make sure to stay tuned to @OpenEurope, @LondonerVince and @pswidlicki.

Will EU foreign ministers agree on what to do with Russia?

(l-r) The foreign ministers of Italy, Spain and France

EU foreign ministers will meet tomorrow to discuss what to do with Russia in light of last week's MH17 plane crash, where almost 300 people lost their lives. The option of moving to tougher 'Stage 3' economic sanctions will be on the table. While the UK, France and Germany have all warned Moscow that it will face further sanctions if it fails to secure the crash site and guarantee a thorough and independent investigation, all eyes are on Italy and Spain - usually among the most dovish member states when it comes to EU-Russia relations.

After a couple of cautious statements over the weekend, a spokesman for the Italian Foreign Ministry is today quoted as saying,

"If Russia doesn't cooperate with the investigation [into the crash], we are very much ready to support the sanctions."

Belated compared to other big EU countries, but this is the most strongly worded statement coming from Rome to date. One could expect Italy to take a tougher stance this time around, not least because the main objection raised by Eastern European member states to the appointment of Italian Foreign Minister Federica Mogherini as the new EU foreign policy chief is precisely the fact that Italy is regarded as too soft on Russia.

Meanwhile, speaking to the press this morning, Spanish Foreign Minister José Manuel García-Margallo took a milder position. He refused to condemn Russia for the crash, and suggested waiting for the outcome of the investigation by the International Civil Aviation Organisation (ICAO) before considering any further steps.

On top of this, despite presenting a united front, Germany, France and the UK might not yet be on exactly the same page - not least because France continues to look unwilling to put its sale of Mistral ships to Russia on the table, and Germany's prime concern seems to be to preserve cohesion within the EU, rather than driving tougher sanctions. The big EU member states are therefore still not all on the same wavelength - although the fact that Italy might be hardening its stance is an interesting development.

Once again then, it is far from granted that EU foreign ministers will be able to agree on tougher sanctions on Russia tomorrow. However, it is looking the most likely it has been for some time.

EU leaders fail to agree on the remaining top jobs. Anything to remember from yesterday's summit?

Yesterday's European Council summit ended without an agreement on the remaining EU top jobs. However, something interesting still came out of the meeting.

A socialist (and a woman?) for next EU foreign policy chief

EU leaders appear to have established that the next High Representative for EU foreign policy will be a centre-left politician. German Chancellor Angela Merkel, French President François Hollande and Italian Prime Minister Matteo Renzi all said it in the respective post-summit statements.

Renzi, who is pushing for Italian Foreign Minister Federica Mogherini to get the job, also stressed that, "Everyone agrees that there's no other candidacy than Italy's." Hollande added that the High Representative "will necessarily be a woman, taking into account the image of Europe we have to offer". The French President also made clear that he backs Mogherini's candidacy.

The next European Council President will be appointed by unanimity, and could be one of the 28 sitting EU leaders

As Hollande put it during his press conference, the next European Council President "will be a personality that will have to gather consensus". Similarly, Merkel said, "We need a personality...who can hold us 28 together."

Interestingly, Renzi told Italian journalists:

"Hollande said that, according to him, the next European Council President has to be one of the 28 [sitting EU leaders]. It doesn't matter whether [he/she is] from the eurozone or not. He got broad support [for this idea]."

Speaking after the summit, Polish Prime Minister Donald Tusk confirmed that his name has been informally floated for the post of European Council President (an option we discussed here and here), but that he had not been approached officially.

Tusk reiterated that he would prefer to remain in Poland, but then added:

"We have to play out a complicated game and sometimes in this game the argument goes that all options remain on the table. Therefore, if you ask me if this is impossible, I will say that in the negotiations I prefer to keep every eventuality in reserve in order to achieve the maximum that Poland could possibly achieve."

And that was it. EU leaders will meet again on 30 August to try and wrap up a deal. We will be monitoring the meeting very closely, despite it being on a Saturday.

Will Tusk take over from van Rompuy, and what would it mean for Cameron?

Tusk and Merkel "discuss the World Cup" ahead of today's
European Council summit (h/t Maciek Sokolowski)

Yesterday, we reported that Italian Foreign Minister Federica Mogherini's bid to become the next EU High Representative for Foreign Affairs has run into trouble due to her perceived lack of robustness vis-a-vis Russia and Putin, with around ten or eleven countries - mostly from central and eastern Europe - opposing her candidacy. We argued that one way to try to square the circle would be to appoint someone from that region as European Council president to replace Herman van Rompuy, with Polish PM Donald Tusk the most credible candidate.

Today's Rzeczpospolita splashed the news that Merkel was urging Tusk to take the European Council President post and a few hours ahead of the European Council summit this scenario remains very much in play:

#EU diplos tell me latest ticket making rounds: #Poland's Tusk as @EUCouncil pres to placate East on #Mogherini at #HighRep. Tusk resisting
— Peter Spiegel (@SpiegelPeter) July 16, 2014

It is understandable why this 'dream ticket' could generate widespread support - it ticks a number of boxes; at least one top post goes to a woman, one to someone from central and eastern Europe, an experienced politician as European Council President and a relatively junior one as High Rep. It is clear why Merkel - who has good relations with Tusk - is pushing his candidacy.

So why is Tusk resisting? Well, the main reason - aside from his lack of language skills - is that he has no immediate successor as Polish Prime Minister (not least because he has culled any potential challengers) and Polish domestic politics are particularly precarious in the wake of the Wprost tapes scandal. Law and Justice are currently leading in the polls and it is not clear whether the government would be able to hang on without fresh elections in the event of a Tusk departure. Moreover, Tusk himself feels he still has unfinished business in Poland.

Nonetheless, Mutti can be very persuasive so it cannot be completely discounted, and van Rompuy's successor does not take over until November, which leaves a bit of time for a transition. Given that the role will be very important in broking David Cameron's potential renegotiation, what would it mean if Tusk got the job?

Well let's start with the positives - like the UK, Poland is a non-euro country so shares concerns about eurozone integration potentially disadvantaging non-euro members. Poland is also economically liberal and backs further expansion of the single market and the EU-US free trade deal (TTIP). Poland and the UK have also been close allies on Energy issues and with Russia having emerged as a common concern, both recently worked together to push the EU to adopt a tougher position on Russia. Finally, if Tusk were to get the job, he would be keen to stay close to Merkel, something Cameron could use to his advantage.

However, on the whole, a Tusk Presidency may not be good for Cameron; the two have a strained relationship, exacerbated in recent times by the row over EU free movement and Cameron's (ill-advised) comments about Poles claiming UK benefits (Tusk's former spokesperson Pawel Gras claimed the Polish PM had a proper f****** go at Cameron over these). Moreover, while Cameron and Tusk may agree on specific issues, Tusk is dismissive of Cameron's broader argument that the EU is need of fundamental reform and he is therefore unlikely to go out of his way to help him get significant concessions - Cameron would therefore need to ensure he has enough support among other national leaders to negate this factor.    

Martin Schulz's revenge: Will the European Parliament block the UK's EU Commissioner?

If you read our press summary this morning (if not, do sign up!) you would have seen - before anyone else outside Germany incidentally - that Lord Hill, the UK's nominee for EU Commissioner, is already at risk of becoming a victim of an increasingly assertive European Parliament.

Martin Schulz – the ‘European Commission Presidential candidate’ who was re-selected President of the European Parliament after his socialist group in the EP came second in the European elections - was made persona non grata by Labour in the run-up to the European elections.

He was seen as too federalist, and someone who would only give Ed Miliband additional headaches shortly after Labour ruled out an In/Out referendum. He’s had a rough ride in the UK over the Spitzenkandidaten, where he clashed head on with the Tories and most other British people. He may now take his revenge.

Speaking to Deutschlandfunk radio this morning, he said of Lord Hill:

"I cannot imagine that, with his radical anti-European views, provided that he has them, [Lord] Hill can get a majority in the European Parliament…It will become clear if Mr Hill approaches us without prejudice, and that will certainly influence whether or not he gets a majority."

The European Parliament cannot formally reject individual Commissioner-nominees, but can veto the entire European Commission. Therefore, MEPs have de facto 'blackmailing powers' to pick off individual nominees. Interestingly, Schulz added that a rejection of Lord Hill in such a way "cannot be ruled out".

In fairness, Schulz was asked a clearly leading question when making these comments:

"David Cameron has proposed the eurosceptic Jonathan Hill as [the UK's] next EU Commissioner, and [he's] a determined sceptic of the euro and the EU. Can one assume that the next EU Commission  will become significantly more eurosceptic, blocking things from the inside?"

So, is this posturing or is Schulz meaning business? Well, as for now, we should treat the comments with caution. Even if Schulz is serious, he will need to get a majority of MEPs to agree that Hill should be rejected on basis of "radical anti-European views, provided he has them". Hill isn't exactly on record spewing out Farage-type anti-EU slogans. The point about Lord Hill is that he's a very different type of political operator altogether: he's someone who strikes deals, rather than engaging in shouting matches or trading in platitudes.

Schulz will struggle to build a case on this one - not least since Lord Hill seems like exactly the type of pragmatic, deal-maker type person MEPs should like. Still, it's a strong statement from Schulz.

Is the UK's new man in Brussels a dark horse?

On his Telegraph blog, Open Europe Director Mats Persson looks at Lord Hill's nomination as the UK's next European Commissioner:

This morning, Brussels watchers, virtually in unison, typed the following name into Google: Lord Hill. David Cameron’s long-awaited nomination for the UK’s next European Commissioner was hardly a household name.

In 2009, Gordon Brown nominated Baroness Ashton for the post – the then leader of the House of Lords, known to few people outside of Westminster. As it turned out, Ashton grew in the role and will leave Brussels with a relatively good reputation. The main problem was that Asthon’s position – EU foreign affairs chief – meant long absences from Brussels. This proved critical as, whether we like it or not, working the Brussels corridors and getting stuck into the agenda-setting “College of Commissioners” are absolutely vital if the objective is to make as many EU proposals as possible come with a UK flavour. Some people hate this stuff – including William Hague who just refused to go anywhere near the role despite being the most obvious candidate – but others thrive on it.

I was always in favour of Cameron sending a high-profile figure to Brussels. It would have sent a strong signal that EU reform is for real and improved the likelihood of the UK getting a top economic job – internal market, competition or trade. Lord Hill lacks the obvious external gravitas and high profile, so in that sense, his appointment has reduced the chances of the UK getting a top job. Cameron has been criticised for not sending a sufficiently strong signal of intent. However, not least since I expect several portfolios – including internal market – to be broken up or altered, the job allocation is unusually unpredictable, and we shall have to wait and see. Also, sending someone with a lower profile may work in the UK’s favour. A heavy hitter – particularly with a Eurosceptic reputation – in combination with a big portfolio may have been too much for EU partners and Juncker to swallow, not to mention the European Parliament. And Lord Hill is hardly a novice, having worked across departments and at the heart of government, including as Chief of Staff to John Major, during which he was involved in negotiating the Maastricht Treaty.

On making EU reform happen – which remains the key objective – Lord Hill is a clever operator with a fantastic reputation in Westminster circles. Brussels is a very different place to Westminster, but if he can replicate his operational style over there – winning people over, striking deals – then perhaps he’s exactly the type of person the UK should be sending. Opting for a Viviane Reding-type, who does a lot of shouting but achieves little, wouldn’t be ideal either.

There's still no denying that choosing someone less known remains a gamble. But Lord Hill may yet surprise plenty of people both at home and abroad.

Which Commission post should the UK push for (clue: not energy)?

When it comes to EU top jobs, if you snooze you lose, as
Gordon Brown discovered to his cost in 2009

In a new briefing published this morning we argue that after the row over Jean-Claude Juncker’s appointment, David Cameron can regain the initiative by sending a heavy-hitter - and not simply someone who happens to be available - to Brussels with the view to securing a top job in the new European Commission. But here is the crucial question - what job should the UK push for?

Here are the key points from our briefing:

• Even though conventional political wisdom says that it’s impossible for the UK to bag the internal market portfolio, this is precisely what David Cameron should ask for, not least given that Germany, in particular, may want to give the UK a quick win in order to reduce the risk of Britain leaving the EU.

• To boost the chances of this happening, financial services could be split off from the internal market portfolio. However, in this scenario, the key is for this portfolio to go to a country that actually has a meaningful financial services industry, or the strategy could backfire.

• The second best outcome for the UK would be to secure the competition portfolio. competition is by far the most powerful DG, with the power to impose multi-million euro fines, prevent mergers and restructure banks. The portfolio would allow the UK to ensure a business-friendly environment and ensure fair competition within the single market by preventing discrimination against non-euro member states. It also establishes a political link to eurozone - it’s impossible for eurozone leaders not to engage with the Competition commissioner.

• The Trade portfolio is often mooted as a good one for the UK, and on substance it certainly is. Being able to conclude the EU-US free trade deal (TTIP) would be a great scalp. However, it is important to remember that Commissioners’ ability to impact EU policy is not limited to their own briefs; many policy proposals are debated within the College of Commissioners offering every Commissioner the opportunity of raising any concerns at an early stage. Just as the EU’s High Representative for Foreign Affairs – currently held by Baroness Ashton - the Trade Commissioner is often absent from Brussels, thereby limiting the UK’s overall influence.

• The energy portfolio would be a relative disappointment for the UK. Yes, energy is a hugely important issue for Europe – and liberalised single market could help tremendously in both boosting energy security and keeping cost down. The Energy Commissioner could also play a key role in keeping the EU out of shale gas regulation – a key UK objective. However, the big push needed to change the political culture in Europe for this to happen won’t come from the European Commission and will take a long time to achieve anyway. This battle will first need to be won in national capitals. Taken together though, the Competition Commissioner probably has more sway over the EU energy market by being able to strike down attempts at creating national champions and new forms of intervention – as illustrated by the current stand-off between Germany and the Commission over Berlin’s rebate for energy intensive industries from its domestic renewable surcharges.

• Arguably, the social affairs brief would be better than the energy portfolio given how hugely important the rules on access to benefits for EU migrants are for the wider debate in the UK.

Just as important as the UK’s portfolio is the distribution of other key portfolios among reform-minded countries like the Netherlands and Sweden. Cameron needs to be far cleverer than Gordon Brown was in 2009, when France got internal market and Romania agriculture. This won’t be easy though. Having lost out on one of the three ‘top jobs’, France could push for either the competition or internal market brief. However, if France keeps the internal market, financial services should be split off as well.

Finally, the appointment of the new President of the European Council will also be crucial – in some ways just as significant as that of the Commission President – given that this will be the person in charge of brokering Cameron’s negotiations with other heads of state and government.

It's certainty all to play for.