Is Juncker saddling up to take on the EU's red tape dragon?

In an interview with Bild am Sonntag, European Commission President-designate Jean-Claude Juncker argued that:

“It is right that there are concerns [among EU citizens] that the EU is interfering in things that are not its concern… for this reason, I’ll create a European Commissioner for cutting bureaucracy.”

This is a welcome suggestion - we floated a similar idea back in our "EU localism" report back in 2011, and the Dutch subsidiarity review also recommended a 'subsidiarity commissioner'. Of course Juncker is not be the first person to say they wish to EU cut red tape and he will most likely not be the last. However, this is an encouraging sign, and suggests that he is not totally deaf to the concerns of business and citizens.

To make the idea more than symbolic, Juncker will need to do more than create a new post. The new Commissioner will need to be able to reach across the EU Commission's many departments and force other Commissioners to move forward with scrapping redundant laws. Specific tools could include the imposition of sunset clauses into new legislation and the right to demand updated impact assessments for existing regulations (UK government impact assessments often projected benefits which failed to materialise). For all this to take place, there will need to be a cultural shift in the Commission.

If this is a genuine attempt to de-regulate, Juncker will be able to count on support from UK, Scandinavian, Central and Eastern and Dutch governments. However, Juncker himself has also talked up the need for the EU to be more involved in social policy so it remains to be seen how strong his commitment to de-regulation will actually be.

So this is a welcome idea but one that needs full support and back-up across the EU in order to fly.

If Carlsberg did consolation prizes for 'losing' a 'Presidential' election...

Advocates of Pan-European Democracy, foremost among them the Socialist's 'Spitzenkandidat' Martin Schulz MEP wished to turn the recent European Elections into a quasi-'Presidential' election. The idea was that the 'winner' would be the 'lead candidate' from the leading political group. That turned out to be Jean-Claude Juncker, who is now the President-elect of the European Commission.

In the manner of a US presidential election, Schultz 'conceded' defeat. It might therefore come as a surprise that the self-proclaimed loser in the election has now been rewarded for his defeat by being given one of the other powerful EU presidencies - that of the European Parliament. Schulz was yesterday re-elected as EP President for the next two and a half years with the support of 409 out of the total 751 MEPs.

It's not entirely easy to find an equivalent to the EP President in national democracies: the position involves elements of the "Speaker" role, which exists in the UK, Sweden, Poland and Germany. Notably, the Speaker in these countries come from the largest group or is based on a nomination from the largest group (in the case of John Bercow, a Tory backed by Labour).

However, the EP President has far more power, due to the way 'executive' and 'co-legislative' functions are distrubted in the EU between the Commission, Council and EP. Schulz effectively wields the EP's co-legislative power in talks with other institutions, over issues such as the EU's long-term budget for example. Such positions are most definitely associated with the "winners" in elections.

So if Schulz was a loser on both these counts, why is he still running the European Parliament?

The answer: transnational "democracy". The vote follows the formation of a ‘grand coalition’ within the European Parliament between the centre-right EPP, the centre-left S&D and the Liberal ALDE groups. In other words, in the spirit of pan-European democracy, some representatives from the main groups agreed amongst themselves who should become EP President. In the spirit of transparency, the vote was then put to the full European Parliament via a secret ballot (so we're afraid we can't tell you who actually voted for Schulz).

Yet another reason why the Spitzenkandidaten process has turned out to be a charade. This is Brussels politics, business as usual.

If Juncker is appointed as President of the EU Commission David Cameron will be one step closer to advocating an ‘out’ vote

Open Europe's Christopher Howarth wrote the following article on Conservative Home

Imagine you woke up in a state where the head of the civil service was elected – but not by you. Imagine a state where the top governmental positions were settled in deals in meetings to which your elected representatives were not invited. Imagine that this system had been introduced without your approval. Well, you may soon be living in it if Jean-Claude Juncker becomes President of the European Commission.

So what should David Cameron do? His options are limited; the UK lost the veto on this appointment under the terms of the Nice Treaty in 2001. He can vote against, but cannot prevent himself being outvoted.

This is a major problem on two levels. First, by appointing Juncker EU member states have conceded the precedent that the European Parliament is now responsible for selecting the Commission President. This will politicise the Commission, and make it subject to perennial Brussels political deals between MEP factions. Juncker’s route to power has been paved by a series of such contradictory deals cut firstly with the Christian Democrat EPP; then the Socialist S&D; then, reportedly, the Socialist Prime Minister of Italy and French President – and allegedly the German mass circulation Bild newspaper. Needless to say, this bears no relation to the results of the recent European Elections and is a straightforward power grab. It is a cession of power not authorised or even discussed in the UK Parliament.

Beyond the principle and the person, Juncker’s appointment presents a strategic headache for David Cameron and his Europe policy. The assumed policy is to provide enough tangible evidence that the EU can reform to allow Cameron to advocate an ‘In’ vote in his promised 2017 referendum. In doing so, he has bet the farm (or the UK’s EU membership) on his belief that other member states, notably Germany, will wish to bail him out. Juncker’s appointment is a clear message that he cannot always rely on his fellow leaders to see him through when they come under their own domestic pressure.

So what should Cameron do? He could take being outvoted on the chin, hope for some consolation prize and pray that, next time, EU leaders will help him to deliver change. This is a risky approach. An alternative would be to send a direct message to his fellow leaders that he is not just in favour of EU reform but also believes that it is fundamental to the UK’s continued membership. Cameron could say that if the EU continues in the manner of Juncker’s appointment he will have no choice but to advocate an Out vote.

This would be interpreted as a threat, and be greeted by a wall of hostility in Brussels – but it would have the benefit of being true. It is not an idle threat. Cameron’s plan to base his referendum on the potential for EU reform was the right one, and one from which he cannot back down. Nor can he back the UK’s membership come what may. If he tried to pull the Harold Wilson trick of presenting a few concessions as a major triumph, he will be found out. After over 40 years of EU membership, a cynical British public will not be fooled. Remembering that Cameron was unable to block Juncker will not help in this regard. Cameron has to succeed in EU reform if he is to advocate an ‘in’ vote – it is time others in the EU began to realise that and act accordingly, or it may be Out by default.

Is Bild having second thoughts about Juncker?

If Angela Merkel had privately hoped to quietly ditch Jean-Claude Juncker after the European election, it all started to go wrong when Axel Springer, the media group that owns Bild, Germany's and Europe's biggest selling paper, added its substantial weight to the pro-Juncker/pro-spitzenkandidaten campaign. This severely restricted Merkel's room for manoeuvre.

While Bild's editorial line has not changed explicitly, today's coverage of the issue is notably less enthusiastic. The paper's Brussels correspondent Dirk Hoeren asks "Will the Juncker deal be a dirty one?", with his piece claiming that France and Italy have made their support for Juncker conditional on a relaxation of EU budgetary rules (unlike Cameron who has taken a principled stance).

In a separate op-ed entitled “Merkel’s dilemma”, Bild’s deputy editor in chief Béla Anda argues:

“that the Southern Europeans will make their vote for Juncker dependent on an agreement on their debt policies shows the shabby extent the haggling over the EU’s chief post has reached.”

“If Merkel supports the election of a euro-softener to the post of Commission President, she will have backed the wrong horse.”

“Jean-Claude Juncker should be warned and be made aware that he must not be a chief at the mercy of Southern Europe.”

If you believe in tight observance of budget rules, as most Germans do, the last thing you want is to have a Commission President, appointed on a 'pan-European democratic mandate', who supports relaxing German-inspired rules on budgetary stability and the introduction of eurobonds.

While Juncker might need French and Italian support, ultimately he is the EPP candidate and Merkel is likely to bring her influence to bear. But imagine if 'centre-left' parties with a more avowedly Socialist spitzenkandidat were to win in future. How would Germany respond then, particularly the 'centre-right'? Would it be a case of yes to pan-European democracy, but only if the 'right' candidate wins? It seems like some people are starting to wake up to this prospect.

Is Merkel lining up Lagarde as an alternative to Juncker?

There is an interesting report from Reuters this evening. According to unnamed sources, during a private meeting, German Chancellor Angela Merkel asked French President Francois Hollande whether he would be willing to back IMF Chief Christine Lagarde as the new Commission President.

As Alex Barker from the FT has pointed out, this may refer to a conversation taking place before the European elections, which would, of course, make the story far less interesting. 

Lagarde’s name has been bandied around before but has always been considered an outsider. 

If there's truth in the report it would obviously be very good for the UK and David Cameron, who is a big fan of Lagarde (along with many others). Number 10 will also be hoping that this is Merkel’s first action to try to move away from Jean-Claude Juncker. While she has never been entirely keen on him, she has come under severe domestic pressure. Having a clear, credible alternative ready, such as Lagarde, would certainly help. That said, Merkel's spokesman has already come out to reject the report and reaffirm support for Juncker.

In any case, there remain a number of hurdles to her becoming the new Commission President over the current front-runner Juncker:

• It’s not clear yet if she wants the job. Sources suggest she has not ruled it out but her position as Head of the IMF remains an illustrious one and would be hard to walk away from.

• As Reuters notes, Hollande did not give a clear answer on whether he would back Lagarde. It would be a big ask given that she is from the opposition UMP party and Hollande could well fear it would make him look weak. If he accepted her it would be giving up the chance to appoint his own French commissioner who would likely still have a high level job within the new Commission. On the other hand, rejecting the opportunity to have a French head of the Commission may not play well with the French public.

• Europe will be loath to lose the IMF’s top job and may not retain it. After the Dominique Strauss-Kahn incident there was a sizeable fight over whether Europe should retain the position, with emerging markets stressing that the whole management system of the IMF is outdated given their increased size and relevance for the global economy. If Europe lost control at the top of the IMF it might find it hard to stop a sizeable overhaul of the whole institution, which has been coming for some time. It would also be the second time in recent history that France has walked away from the IMF’s top job – not a tag any country wants to wear.

• The European Parliament (EP) could still block her and may well do given its fierce desire to see the Spitzenkandidaten process upheld. On the other hand, they have also pushed for diversity and as a renowned female European politician, and a strong candidate, it could be difficult for the EP to vote her down.

It may also be questioned whether she will get support within the European Council. Those who support Juncker could still put together a blocking-minority but this would be difficult if she had support of most of the large countries.

Therefore, Lagarde remains a case of wishful thinking at the moment. But, as we've said before, this is still anyone's race so never say never...