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EC president Juncker: Good intentions but wrong profile

14 Jun 2017 - 10:12
Photo: Euractiv.com / Flickr
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At the start of his presidency, European Commission President Juncker stated that his presidency would be decisive in view of the challenges the European Union faces and presented his Commission as “the last chance Commission”. Essentially, Juncker wants to regain the trust of the public. However, the Eurobarometer shows at the end of 2016 that 33% trust the EU. Evidently, there are different ways to assess Juncker’s performance and it is too early to judge the effects given the lead time of policies. Yet, in this paper, the essential question can be addressed whether some of Juncker’s styles contribute to long-term trust.

In complex societies, trust is essential for any organisation. Trust has various dimensions. Firstly, it relates to the organisation’s capabilities. Reliable procedures contribute to effective policies and makes it easier for others to cooperate, to respect rules and to be loyal. Secondly, trust demands leaders who walk the talk and offer stability by defending common values.[1] Thirdly, trust relates to outputs. Particularly in times of economic crisis, trust depends on growth in the short run in response to economic-political tensions.[2] It can be functional in the short run to take short cuts by promising immediate relief through manipulating messages, but the price may be high in the long run.[3] This presents the classic dilemma of how to defend long-term (institutional) credibility while responding to short-term (political) pressures.

Trust in the Commission
The European Commission is an organisation with many tasks, covering a range of policy areas, requiring long-term (e.g. safeguarding the euro) and short-term perspectives (e.g. responding to crises). Its tasks range from neutral legal supervision to the initiation of policies. As a multifaceted institution, a politicised ‘short-termism’ in one area can easily affect the credibility of the Commission as a whole.

For example, Moscovici, the commissioner for economic and financial affairs, is responsible for the European semester and for taxation, and his politicisation of the European semester seems to affect the Commission’s credibility when defending the even-handedness in tax rulings concerning European and American companies.[4] Similarly, the Commission has to defend its independence and reputation in competition policy and this can easily conflict with its allegedly weak supervision of Italy’s support for banks.[5]

Juncker's political approach may suggest a step away from the Commission as a neutral guardian of the Treaty. Source: European Commission
Juncker's political approach may suggest a step away from the Commission as a neutral guardian of the Treaty. Source: European Commission

European integration started mainly as a legal project of integrating markets. The activism of Jacques Delors in this area presented the EU with a fundamental trust-crisis in the 1990s, culminating in the fall of the Commission Santer.[6] Delors’ activism had provoked doubts about the quality and necessity of EU policies. This resulted in innovations such as subsidiarity, impact assessments to sharpen the analytical skills of the Commission and the focus on “doing less but doing better”. Better Regulation professionalised the Commission quite successfully.[7]

The euro presented a new trust crisis and called for growth and jobs. The question is whether – comparable to the progress made in the internal market – trust is now also being regained in the realm of euro policies or whether Juncker is compromising its professional ways of working by an increasing politicisation? Brexit and the rise of populism have imposed the need to address inequality and perceived short-term needs of citizens. The danger, however, is that, as underlined by Fukuyama, short-term politicisation implies a ‘post-fact world’ in which long-term trust in democracy is sacrificed.[8]

A very political president
The Commission operates at the interface between the technocratic level (independent executive and guardian of the Treaty) and the political level (Council of Ministers and European Parliament). It has always been political as underlined by Delors’ successful cooperation with the Heads of State. The formal politicisation of the function of Commission president is a more recent process. Barroso, in 2004, had to write a work plan for the EP before he was supported.[9]

Juncker is the first president elected by the EP and wants to deepen the Commission’s political profile. He regards the Commission as a “very” political body that “should politicise everything” (emphasis in the State of the Union 2015). National politicians, in Juncker’s view, are concerned with national interests,[10] and he accused Heads of State of lacking “a common European sense and a feeling”.[11]

In his ambitions to keep the EU together Juncker may have actually contributed to alienation

Juncker is probably the first Commission president who has been so directly engaged in national politics. Unprecedented, he defended the third rescue package in Greece during the bailout referendum in 2015 against prime minister Tsipras who wanted the package vetoed. He also threatened with serious geopolitical repercussions before the Dutch referendum on the association agreement with the Ukraine because he felt the Dutch government kept too low a profile.[12] Yet, Juncker’s political approach may also suggest a step away from the Commission as a judge-type neutral guardian of the Treaty (as the Dutch government would like it to be[13]).

President of paradoxes
Is Juncker able to combine rational trust (as, among others, embodied in the Commission’s better regulation policy) with a more political style and the delivery of outputs? He emphasises ‘focus’ and ‘big on big and small on small’ to address the image of the EU that is occupied with unnecessary intrusions into the responsibilities of national governments and of citizens.

What ‘big’ is, is evidently a political judgement. Juncker’s work programmes are organised around ten priorities, which suggest a focus. However, it is too early to judge whether he really presented less proposals or basically a more focused agenda. Yet, he clearly wants to respond to social-economic needs through European investments, youth employment measures, and painful migration measures (relocation) to proof that the EU can be decisive.

However, to start the discussion on Juncker’s profile, we need to start with a brief examination of some of his most visible activities.

1          (No) United States of Europe
His move towards democratic legitimacy has institutional consequences, could increase in the power of the EP,[14] and thus turn the Commission into something akin a European government. However, Juncker denies that the EU moves towards a “United States of Europe”.[15] Nevertheless he has called for a European army (which he also scaled-down to European headquarters and defence-related R&D spending).

Juncker is probably the first Commission president who has been so directly engaged in national politics

The Commission’s agenda also includes debates on deeper integration in the Eurozone including Treaty change,[16] ‘own resources’ (i.e. types of EU taxation) and an energy fund (possibly including eurobonds). In addition, Moscovici suggested that the Commission is a sort of “common ministry of finance”. Similarly, a European Solidarity Corps is proposed to solidify a European identity and European solidarity.[17] Juncker’s denials of a United States of Europe sometimes seem to have an element of: ‘Ceci n'est pas une pipe’.

2          Keeping the EU together (or not)
In his ambitions to keep the EU together Juncker may have actually contributed to alienation. Off-hand suggestions about an EU joint army, plans for own resources, deeper integration, etc. came at an unfortunate moment with a view to the British referendum. Evidently, Juncker knew the British sensitivities because Cameron was against the “federalist” Juncker as Commission president. Also in other countries have such statement been divisive. By intervening in, for example, the Dutch referendum on the Ukraine, he may have ignited resistance. Also yes-campaigners saw Juncker’s remarks as a negative attempt to threat voters with geopolitical dangers.[18] It takes more Fingerspitzengefuhl to be a European politician than to be a courageous leader.

3          (Stop) listening to voters
Juncker took initiatives to better listen to citizens. Yet, he also warned governments to stand up against populism: “Never before have I seen national governments so weakened by the forces of populism and paralysed by the risk of defeat in the next elections”, he said in the State of the Union 2016. Similarly, Juncker suggested that in the Netherlands mainstream parties are “running after” and “imitating” populists and that this will make the EU ungovernable.[19]

Questions arise whether criticism of the EU is the same as populism, whether it is helpful in keeping the EU together, and whether national governments can ignore populism. Juncker’s statement that prime ministers should listen less to voters at the same time contrasts with Juncker’s own actions and statements. In a debate in Germany Juncker, to the surprise of his own staff, promised not to apply banking bail-ins to savings: “Savings and cooperative banks are part of our economic model and will thus not be affected by the deposit insurance scheme”.[20] This remark came at a time of great concern about the handling of the German regional banks and the Deutsche Bank. Similarly, Juncker tolerated further delays in economic reforms in France “because it is France”.

A profound concern for national voters was also clear when the Commission gave in to pressures from Germany, France, the Netherlands, and others, by regarding the trade agreement with Canada (CETA) as a mixed agreement. This turned CETA from a Commission responsibility into a national political decision.

4          Determination (or not)
Juncker’s drive to show the EU can solve problems is at odds with actions he could have taken within his own institution. Highly visible were the crises involving new positions for Barroso[21] and Kroes[22], and unfortunate behaviour of German Commission Oettinger.

Are Juncker's ambitions and styles readily adopted and shared by individual Member States? Source: Flickr / Euractiv.com
Are Juncker's ambitions and styles readily adopted and shared by individual Member States? Source: Flickr / Euractiv.com

Oettinger managed to run into several political difficulties at the same time over a Kremlin lobbyist’s private jet, over remarks bordering on being racist and homophobic and by describing Wallonia as “a micro-region run by Communists that blocks”. Yet Juncker, apparently under German political pressure, proposed to promote Oettinger to budget Commissioner. It took Juncker months to propose sharpening of the rules for former ex-Commissioners accepting new positions.[23]

Such lack of leadership was very sensitive in the past. The Commission Santer had fallen over ambiguous behaviour of French Commissioner Cresson after political pressure from Paris that it was unacceptable for a former French minister to be dismissed. Similarly, the Commission seems to have withheld information on ‘dieselgate’ and it was the European Parliament in 2016, not a self-critical assessment of the Commission, that exposed the weak reactions of Commission Juncker.

Questionable as regards ‘determination’ and ‘the EU that delivers’ is also the way in which countries with lagging economic reforms have been treated. Juncker’s hesitations to address French, Spanish and Portuguese reforms resulted in mounting doubts about the capabilities and willingness to enforce rules in the face of resistance by member states. Such examples of highly visible politicisation affect the reputation of the Commission as defender of rules and of long-term reforms.[24] In 2016, Juncker in his State of the Union also kept silent about the delays in reforms in especially France and Italy. Failing economic reforms is a potential time bomb under the euro.

5          (Politicisation of) better regulation
The ‘better regulation’ agenda to ensure reliable policies has on the one hand been reinforced by Juncker in the form of a new internal quality-control mechanism. Yet, Juncker has also floated major political initiatives without impact assessments such as free WiFi in town squares (which seems to be of little cross-border relevance) and free interrail (what is the impact of major additional flows of teenagers on cities in peak-months?). Juncker’s investment plan (EFSI) is a political promise from his election campaigns in 2014 and Commission officials commented their assessments were produced later in order to match Juncker’s investment ambitions.

The announcement of doubling of this fund was also a political promise in his State of the Union 2016 and quickly dubbed “successful but young”. Bruegel assessed that this hugely ambitious investment fund concerns only a small amount of investments that would otherwise not have been made.[25] Displaying doubts, Dutch prime minister Rutte stated he wants a separate “independent evaluation”. Apparently, reliability is at stake.

The political profile that Juncker opted for to adopt would make him particularly suited for the position Donald Tusk now enjoys in the European Council

Enforcement also seems problematic. France, Spain and Portugal were not fined for breaking SGP rules even though there appears to have been a legal obligation to do so.[26] The previous Commissioner for the euro, Olli Rehn, tried to defend his independence within the Commission,[27] but now Juncker personally grants France delays “because it is France”. This politicisation is at odds with the emphasis Juncker and his first vice-president Timmermans put on respecting the rule of law. His previous image as the “politician who shuns the spotlight and famously quipped he prefers ‘dark, secret rooms’”[28] does not help. Trust is hard to gain but easy to lose.

6          The EU as creator of growth and jobs
Juncker wants to regain trust of people though. However, is it accurate to assume that the people have lost trust in the EU, that the EU can repair whatever trust is lost, and that the EU can actively create jobs? The current trust crisis is primarily a crisis of trust in Southern and Eastern national governments. It is therefore debatable whether Juncker is right to assume that trust in the EU must be regained.[29] Moreover, it is unclear what the EU can do in the long run when national governments stall reforms.

Conclusion: Unfit to lead the Commission
Juncker is a warm defender of European integration and a leader who operates as homologue amongst the Heads of State and Government. He wants to make a difference by creating growth and jobs and fighting off the harsh consequences of austerity policies. While trust is based on reliability (better regulation), outputs (with a potential conflict between short- and long-term outputs) and leadership style, Juncker seems to have chosen to politicise “everything” combined with a leadership style expressed through contradictions. This may thwart technocratic (procedural) achievements of earlier presidents in terms of increasing the reliability of the Commission as an institution.

The European Commission is a ‘complex’ institution as defined in organisational science literature: an institution with different kinds of tasks that demand different kinds of behaviour, skills and perceptions of time. The basic tasks of the Commission are policy initiation, monitoring and enforcement – demanding the best possible information, assessments and judgements. Moreover do monitoring and enforcement of policies demand neutral, judge-like, scrutiny and if necessary corrective measures.

The political profile Juncker opted for himself would make him particularly suited for President of the European Council (now: Donald Tusk). The European Council is for the political perspectives and for handling crises. The European Commission should be directed by someone who, first of all, ensures essential long-term trust based on facts, reliable analyses and independent supervision so that authority is based on content.

 


[1] P. Selznick, Leadership in Administration, Berkeley: University of California Press, 1957.

[2] F. Rothab & D. Grosb, ‘Crisis and Citizens’ Trust in the European Central Bank’, Journal of European Integration, vol. 36 (2014), nr. 3.

[3] M. Alvesson & A. Spicer, ‘A Stupidity-Based Theory of Organizations’, Journal of Management Studies, vol. 49 (2012), nr. 7, pp. 1194-1220.

[4] ‘European Commission unfairly targeting US companies over taxes, official says’, The Guardian, 29 January 2016.

[5] ‘ECB’s Monte Paschi Capital Bar Would Trip Up 10 Other EU Banks’, Bloomberg, 30 December 2016.

[6] G. Majone, ‘The Credibility Crisis of Community Regulation’, Journal of Common Market Studies, vol. 38 (2000), nr. 2, pp. 273–302.

[7] H. Kassim et al., The European Commission of the Twenty-First Century, Oxford University Press, 2013; A. Schout & J. Sleifer, ‘A public administration take on legitimacy: Better Regulation as multilevel governance challenge’, in: M. Ambrus, K. Arts, E. Hey & H. Raulus (eds.), The Role of ‘Experts’ in International Decision-Making, Cambridge University Press, 2014, pp. 361-382.

[8] F. Fukuyama, ‘The emergence of a post-fact world’, Livemint, 30 December 2016.

[9] A. Schout, ‘Tien jaar Barroso: Laf of smooth operator?’, Internationale Spectator, vol. 68 (2014), nr. 2, pp. 30-35.

[10] ‘Prime Ministers listen too much to voters, complains EU’s Juncker’, Telegraph, 5 May 2016.

[11] ‘Power Struggle in Brussels and Berlin over Fate of Greece’, Der Spiegel, 13 March 2015.

[12] ‘Juncker: Dutch Ukraine vote could spark “continental crisis” ’, Reuters, 9 January 2016.

[13] ‘Nederlandse inzet Informele bijeenkomst regeringsleiders 27 EU-lidstaten te Bratislava’, Minbuza-2016.606045.

[14] As presented, a.o., in the 4th and 5th President’s report.

[15] ‘For an Ambitious Europe’, Notre Europe, 7 November, 2016; also Financial Times, 9 July 2014.

[16] The White Paper on the Future of Europe (non-legislative; Q1/2017), in: Commission Work Programme 2017.

[17] Sunday Express, 16 September 2016.

[18] NOS, 9 January 2016.

[19] De Volkskrant, 17 December 2014.

[20] Der Spiegel, 17 June 2016.

[21] ‘Juncker questions Barroso's decision to join Goldman Sachs’, The Guardian, 15 September 2016.

[22] E.g. ‘Uber’s appointment of Neelie Kroes flags up EU’s revolving door’, Financial Times, 5 May 2016.

[23] “Too little, too late”, according to EUobserver, December 2016.

[24] ‘Door dit schandaal begrijp je precies waarom burgers zo cynisch zijn over de EU’, De Correspondent, 27 November, 2016.

[25] G. Claeys & A. Leandro, ‘Assessing the Juncker Plan after one year’, Brussels: Bruegel, 17 May 2016.

[26] Der Spiegel, June 2016.

[27] A. Schout & A. Mijs, ‘The Independent Commissioner: An Administrative Analysis’, in: E. Ongaro, Multi-Level Governance: The Missing Linkages, Bingley: Emerald, 2015.

[28] The Guardian, 2014.

Auteurs

Adriaan Schout
Senior Research Fellow & Coordinator Europe at Clingendael Institute