The Business Times

After a wild half-decade, EU prepares for 2020s

Published Wed, Jun 19, 2019 · 09:50 PM

EUROPEAN presidents and prime ministers meet for a landmark summit on Thursday and Friday that will shape the continent until at least 2024. The meeting will focus on the bloc's future strategic agenda, but the most difficult business will be carving up top EU jobs with a transition of power underway in Brussels.

Up for grabs are key posts, including the European Central Bank chief, European Commission president, and foreign and security policy supremo. With Mario Draghi, Jean-Claude Juncker and Federica Mogherini respectively all leaving office, new postholders are scheduled to be in place by Nov 1.

Yet, there is a battle royale ongoing to find their replacements. And also for a successor for president of the European Council Donald Tusk too with a new officer holder scheduled to be in the post on Dec 1.

This is leading to a European version of "Game of Thrones", with key countries - including traditional allies on EU affairs, Germany and France - at loggerheads. Take the example of the European Commission president role, widely seen as the most important in Brussels.

Member of the European Parliament (EP) Manfred Weber is the favoured candidate of fellow German national Angela Merkel, and he has the backing of many in that legislature too. This is because the EP forged an agreement five years ago that the choice of candidate for commission president should be nominated by the voter bloc that secures the most seats in the parliament.

While national governments have ultimate power over the appointment, the legislature's voice was louder than ever on the important decision in 2014 to select Mr Juncker. And Mr Weber is the choice of the right-of-centre European People's Party (EPP) which emerged the largest single party in last month's EP elections, albeit with a reduced number of seats from before.

INTENSE POLITICKING

Yet, those not happy with the choice of Mr Weber include France's Emmanuel Macron, Spain's Pedro Sanchez and Greece's Alexis Tsipras. They favour other candidates to be considered, including the EU's chief Brexit negotiator Michel Barnier (a fellow Frenchman to Mr Macron), outgoing EU Competition commissioner Margrethe Vestager (a Dane) and outgoing vice-president of the commission Frans Timmermans (a Dutchman).

Part of the reason for this intense politicking over the selections, which may mean that not all or indeed any postholders are finalised this week, is the choppy waters that the bloc is facing. Storm clouds are gathering again not only from the Brexit talks, but also Italy's Eurosceptic coalition government and the populist surge in Eastern Europe, including Hungary and Poland, which many prime ministers and presidents think mean the next cohort of postholders must be the very best qualified persons for the job, rather than the beneficiaries of political horse-trading.

This underlines the wild five years that the bloc has just faced which led to Mr Juncker's repeated warnings, including last June, that "the fragility of the EU is increasing". At that European Council summit, the bloc struggled to reach a deal on the migrant crisis after Mrs Merkel's political future was threatened, and Mr Juncker asserted that "the cracks are growing in size" on various fronts.

The issues in play then - how best to rescue migrants from the Mediterranean Sea - exposed divisions, with Germany and France pushing hard for a comprehensive way through the impasse, while others like Hungary and Italy - run by populist leaders - much more sceptical. This latter harder-line stance was exemplified in Hungary last year when the nation's parliament passed laws to criminalise any individual or group offering to help asylum claimants following that country's leader Viktor Orban's landslide re-election.

These ongoing European tensions over issues like asylum and immigration coincide with the expected end-game of the Brexit negotiations which will come to a head again this autumn. With the exit process having consumed a massive amount of time of both London and Brussels, there are growing indications that the United Kingdom could leave with "no deal" in October, especially if Boris Johnson becomes UK prime minister next month.

Beyond Brexit, the gathering storm clouds highlight the fragility of the political situation across the continent as shown by the election of Italy's eurosceptic coalition government last year, the weakening of Mrs Merkel's government and the growing populist surge in Eastern Europe.

Summing up the challenges, Mr Tusk has remarked that they are perhaps the "most dangerous than ever" with three key challenges "which have previously not occurred, at least not on such a scale". According to him, the first two threats relate to the rise of anti-EU, nationalist sentiment across the continent, plus the "state of mind of pro-European elites" which he fears is too subservient to "populist arguments as well as doubting in the fundamental value of liberal democracy".

While Brexit exemplifies, from Mr Tusk's perspective, these challenges, the problem is by no means limited to the United Kingdom. Indeed, Mr Macron admitted last year that even France, one of the two traditional motors of EU integration alongside Germany, would probably vote to leave the EU if presented with a similar choice to UK's 2016 referendum.

And if these issues were not big enough, the third threat cited by Mr Tusk is what he calls the new geopolitical reality that has witnessed an increasing assertive Russia, and instability in the Middle East and Africa which has driven the migration problems impacting Europe. And intensifying this is uncertainty from Washington with Donald Trump previously calling for more Brexits across the continent.

STORM CLOUDS

While Mr Trump is widely criticised across the continent, his message has secured traction with several governments. Italian Prime Minister Giuseppe Conte, for instance, has emerged as his strongest supporter in Western Europe.

This political affinity is reflected in the alignment on key issues like Russia and immigration, with Mr Conte asserting that both "governments in Rome and Washington represent change, they were chosen...to change the status quo". While the Italian government has so far kept its powder dry with Brussels, 5 Star Leader Matteo Salvini says he wishes the nation to leave the EU, while coalition partner The League has called for a referendum on whether Italy should remain in the euro single currency area.

Taken overall, while some in Brussels sensed last year that the eurosceptic wave had passed its peak, storm clouds are gathering again. Decisions taken this week, and in the months to come, will help define the EU's longer-term political and economic character in the face of multiple challenges, Brexit and beyond.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Columns

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here