On the face of it, it seems an undeniable French victory. Pierre Moscovici, the finance minister who was reshuffled out of the French government in April, has landed a huge portfolio at the heart of the European Commission under its president-elect Jean-Claude Juncker. The commissioner for economic and monetary affairs does not just handle economic and financial affairs but also looks after customs and tax. It is via this commissioner’s office that such decisive issues for the EU's future as economic stimulus policy, austerity, continent-wide tax harmonisation, the fight against tax havens and the tax on financial transactions all have to pass. It is, in effect, at least two commissioner posts rolled into one.
There is, then, every apparent reason for Paris to rejoice at the announcement of Moscovici's appointment by Juncker in Brussels on Wednesday. And even more so because it was a victory that seemed far from certain, on paper at least. From the start of the summer François Hollande had been pushing for a top economic portfolio for his commission candidate, and in July he even went so far as to demand a vice-presidency. But the Germans intervened to oppose the nomination of a French candidate to such a sensitive economic position – one handling the public accounts of Eurozone members – given that France itself has had such difficulty in sticking to its own budget commitments. Indeed, just this week the French treasury announced that it will miss its budget objectives for 2014 by some margin, provoking inevitable irritation at the Commission in Brussels.
In appointing Moscovici Juncker held firm against German pressure, in what was a first test for a man who is determined to show his independence from Berlin. There is doubtless a sense, too, in which Juncker wants to differentiate himself from the EC presidency of his predecessor José Manuel Barroso, who has often shown himself too submissive towards Angela Merkel's Germany. The Germans have also obtained a strategic economic post, one covering the digital economy, but it is significantly less important that Moscovici's position. Meanwhile the other main economic portfolio, which covers financial regulation, has been given to the controversial British candidate Jonathan (Lord) Hill.
So a clear victory for France, then. Except that it is not quite as straightforward as that. In choosing his appointments Jean-Claude Juncker has shaken up the Commission's structure. After days of lengthy negotiations he has carried out what amounts to a major reform of the organisation, downgrading some portfolios (that of enlargement, as Juncker says there will be no new EU members during his five years in office) and creating others such as 'financial stability', which is part of Hill's remit. Above all the new president now has five vice-presidents at his side, whose job it will be to play the role of coordinators. (See the full new structure here.) Juncker's aim is to have a more subtle and dynamic executive, one able to adapt its structure according to the challenges that arise. That, at any rate, is the official story in Brussels.
Enlargement : Illustration 1
The former Luxembourg prime minister has chosen to place alongside Moscovici two vice-presidents with economic responsibilities, both of them European political heavyweights. The former Finnish prime minister Jyrki Katainen becomes vice-president for “employment, growth, investment and competitiveness” while the former Latvian prime minister, Valdis Dombrovskis, has been named vice-president for “the euro and social dialogue”.
Moreover, both men are representatives of the pan-European right-wing conservative European People's Party and are wholehearted advocates of budgetary rigour in line with the German approach. When in power in their own countries these two politicians oversaw massive budget cuts. Latvia, which was bailed out by the International Monetary Fund and others during the financial crisis, was seen at the “champion of European austerity”. During the peak of the crisis it cut the number of its public servants from 78,000 to 62,000.
It is therefore hard to know for the time being just what Pierre Moscovici's room for manoeuvre will be in his discussions with Katainen and Dombrovskis when it comes to stimulating economic recovery. Does Moscovici the French social democrat risk finding himself under the supervision of two passionate supporters of austerity? Will he be forced to take a back seat when it comes to setting France's “fiscal consolidation rhythm” as it is known in the jargon, in other words the pace at which Paris has to restore its public finances? We should soon find out. But some observers are convinced they already know the answer. Alain Lamassoure, the MEP for the right-wing French opposition party the UMP, commented: “Pierre Moscovici will be under the supervision of two vice-presidents who have succeeded in their countries with a recovery that has failed in France.”
Be that as it may, unlike Moscovoci the two vice-presidents do not have control of any administrative structure as such. They will be floating commissioners without officials, in charge of co-ordinating the progress of economic issues and setting priorities. But most of the substantive work will be carried out by Moscovici.
According to several Brussels sources Juncker had initially offered Moscovici the post of vice-president in charge of growth, the equivalent of Katainen's position. But the French authorities turned down this new position, preferring a portfolio that was both more traditional and also, in their view, safer, a position directly linked to the Commission's services. For there is always the possibility that these vice-presidential positions will turn out to be empty vessels.
In the meantime, the sharing out of the different roles will not be easy. Moscovici will represent the Commission at the Eurogroup, the meeting of the Eurozone's finance ministers. But according to Juncker it will be the Latvian Dombrovskis who will at the end of the year present the outcome of the “European Semester” which is described as a “yearly cycle of economic policy coordination”. It represents the permanent dialogue that takes place between Brussels and European capitals over how they are managing their public finances. It is within the framework of this dialogue that France risks being punished if it does not respect its commitment to bring its public deficit down to 3% of gross domestic product (GDP) between now and 2015.
Juncker himself has already dismissed any suggestion that the French commissioner will be watched over by two hawkish bodyguards. “The Commission vice-presidents will not be super-commissioners, and simple commissioners will not be second-tier commissioners,” he said, warning against over-simplifications, and describing the role of the vice-presidents as “co-ordinators” not “supervisors”. Unsurprisingly, Pierre Moscovici followed a similar line when he was questioned on the matter in Brussels. “It will not be a relationship of supervision, of chaperoning, that's not how it works, it's a college of commissioners,” said the former French finance minister. “You must not compare one against the other in terms of power, we will all be pulling in the same direction, for more growth.”
Both men were also questioned about the national allegiances of commissioners as they start their work in Brussels. “You must not mix up national and European politics,” said Juncker. “We are no longer the offshoots of member states.” Moscovici noted: “When you arrive at the Commission you don't forget your nationality and your convictions. I am a social democrat and proud to be so, but when you become a European Commissioner you become a defender of the general interests of Europe.” And without mentioning France, the former minister warned that there will be “no suspension, derogation or exception for any country whatsoever”. Some observers wonder whether, in order to prove his credentials to his new European colleagues, Moscovici the social democrat could end up being even more economically orthodox than some of those colleagues.
------------------------------------------------------------------
- The French version of this article can be found here.
English version by Michael Streeter