The Malaysian Insider

DEC 1 — When the European Union selected its first foreign minister recently, British Prime Minister Gordon Brown was ‘elated’ to have secured the position for one of his officials.

But Brown proclaimed victory too soon. For while the British leader concentrated on diplomacy, France and Germany captured the European Commission posts that really matter — those supervising trade and energy.

For the next five years, these crucial European portfolios will be in the hands of people who disdain the so-called Anglo-Saxon economic model, and who wish to impose regulations on the City of London, Europe’s biggest financial centre.

Seldom has a better political trap been concocted, and seldom has a British premier walked so breezily into it.

The European Commission, which runs the continent’s affairs, remains a curious political animal. On the face of it, it resembles the Cabinet of ministers of any country: each of its members is responsible for a single area of activity.

But it is not only an executive body. It can also issue binding legislation. The European parliament can approve Commissioners or dismiss them, but otherwise exercises little daily control.

The Commission also runs a vast bureaucracy. It is, in effect, government, legislature and administrator, all rolled into one.

In theory, each of the 27 EU member-states is expected to appoint one of its nationals to act as a Commissioner, and it is then up to the Commission’s president to allocate responsibilities.

In practice, however, the process is highly political, as countries manoeuvre for important posts.

Britain has not done badly until now. The key portfolio of trade was in its hands.

This year, however, the political manoeuvring was more complicated because two additional jobs were up for grabs: that of president of the European Union, who is not in the Commission, and that of foreign minister, who is.

The British initially aimed to secure the Union presidency for Tony Blair, their former premier. Once Blair’s candidacy bombed, they concentrated on the next target — the post of foreign minister.

Baroness Catherine Ashton, a little-known politician, was duly elected, much to her own surprise: she did not even have a prepared acceptance speech when told of her good fortune.

But while Britain’s diplomats worked frantically behind the scenes, they seemed not to notice that, oddly, neither France nor Germany — Europe’s other biggest states — was competing for either position.

The explanation for this curious reticence came last Friday, when it was announced that 58-year-old Michel Barnier, a former French minister, would supervise Europe’s internal market and services, while Germany’s Guenther Oettinger would decide energy questions.

“France had the last word,” crowed a headline in Le Figaro, one of that country’s top dailies.

“We are very satisfied”, added the German government.

It is easy to see why France and Germany are elated. Barnier has never hidden his distaste for the Anglo-Saxon economic model which, he believes, has been discredited by the current economic crisis.

And Oettinger is expected to push Germany’s energy agenda by protecting Europe’s state-controlled oil and gas companies from open markets, while forging closer energy links with Russia.

For Britain, both appointments are a disaster. Barnier’s plans to introduce new regulations on financial services will hit London disproportionately: At least two international hedge funds are already threatening to leave the British capital.

And plans for a diversification of Europe’s energy dependency away from Russia also lie in ruins.

Eager to look on the bright side, the British claim that this is hardly the end of the story. A former British bureaucrat will be a leading official in Barnier’s office. Presumably, he can be relied upon to temper his boss’ zeal for disciplining financial markets.

The East Europeans, who fear Russia, are also likely to oppose Germany’s energy plans.

Besides, commissioners are not supposed to act on national considerations, the British point out.

Nevertheless, a conflict with London is looming, should Britain’s Conservative opposition win the next general election, due to be held by May. Not very pro-European to begin with, the Conservatives are now pledged to work for the return of some of the sovereign powers which Britain has supposedly ‘lost’ to Europe.

But regardless of future British-European showdowns, it remains obvious that Europe’s Commission is now under the control of people who believe in more state intervention and regulation. Europe is likely to be much keener on defending its “national champions” from outside competition.

And the new Commission has wider powers than before. Most of its decisions can no longer be vetoed by individual member-states.

Yet, at least in one area, the new Commission has shown continuity. It has just announced plans for a 3.7 per cent pay hike for its senior officials, while all national civil servants are having their salaries either cut or frozen.

Treating the European electorate with utter contempt is evidently not a habit easily broken. — The Straits Times