5 March 2015

Juncker horse-trading comes back to haunt Berlin

Don’t be fooled by the façade of warm relations between German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker. Following their meeting in Brussels yesterday, the German press reports in full force today about what was really going on beneath the handshakes, smiles and kisses.

“The anger” in Berlin regarding the economic policy of the European Commission, particularly the failure to implement the Growth and Stability pact, is “an open secret” writes Frankfurter Allgemeine Zeitung.

As we pointed out at the time of the European elections last May, Berlin was taking a big gamble by throwing its weight behind the idea of ‘lead candidates’ (spitzenkandidaten) for Commission President. We warned that rather than heralding a new dawn for democracy and transparency in Europe, Juncker’s appointment would be contingent on the same old backroom horse-trading as before, and that Juncker’s promises of greater fiscal flexibility for struggling Eurozone countries in return for their support could come back to haunt the Germans in a spectacular fashion – as now appears to be the case. Our Director Mats Persson wrote at the time:

Now, it’s Europe’s worst kept secret that Italy’s Matteo Renzi and France’s Francois Hollande are looking for a horse-trade: their votes for Juncker are conditional on greater flexibility in the eurozone’s rules on budget deficits, the very opposite of what Merkel and most Germans want.

Mats Persson – The Telegraph: Berlin is playing with fire over the EU’s top job, 23 June 2014

Best Enemies

German tabloid Bild, which in a game-changing intervention threw its weight behind Juncker, increasingly seems to be regretting this decision, especially as its tough line on Greece is at odds with Juncker’s overtures to new Greek PM Alexis Tsipras.

Today the paper argues that “in reality Merkel and Juncker are best enemies,” due to Juncker’s wish to reassert the role of the Commission as the main policy-making body of the EU, his leeway on French fiscal targets, and his “close relations” with Greek Prime Minister Alexis Tsipras. “In the corridors of Berlin,” claims Bild, “it is hissed that Juncker is a ‘Greece sympathiser’ and a ‘deceptive player’.”

Frankfurter Allgemeine Zeitung writes, “Juncker would interpret the criticism from Berlin as a compliment. Even as the lead candidate for the European elections, he made it clear that, in his opinion, the Commission must reclaim its role as the main economic-policy actor.” Süddeutsche Zeitung quotes a senior German official complaining, “We have the impression that the Commission is progressively abandoning the previously accepted stringent interpretation of European rules.”

The Juncker hangover is getting worse

We’ve been predicting this clash for months, and documented how the German press and commentariat started suffering from a Juncker hangover pretty soon after his appointment became certain. As we warned back in June last year:

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.

Open Europe Blog: Is Bild having second thoughts about Juncker? 19 June 2014

The irony is that as the spitzenkandidat of the ‘centre-right’ EPP group, Juncker is supposed to stand up for fiscal discipline so one can only imagine how Berlin would react if in the future the ‘centre-left’ group with an avowedly Socialist spitzenkandidat were to ‘win’ the European elections. 

Not to toot our own horn too much, but we definitely saw this one coming.