THE BARROSO COMMISSION: WHAT CAN WE EXPECT?

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 004959

SIPDIS

E.O. 12958: DECL: 11/19/2014
TAGS: PREL PGOV EAID ETRD EUN USEU BRUSSELS
SUBJECT: THE BARROSO COMMISSION: WHAT CAN WE EXPECT?

REF: A. USEU BRUSSELS 4739

B. USEU BRUSSELS 4789 AND PREVIOUS

Classified By: Rick Holtzapple, PolOff, Reasons 1.4 (B/D)

SUMMARY
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1. (C) The new Barroso European Commission, having finally
emerged from a rough confirmation process, takes office
November 1. Barroso intends to project a more hands-on,
activist approach focused on economic reform under the
"Lisbon Agenda," but we expect a great deal of policy
continuity. Greater integration and a growth-oriented agenda
for the EU are goals the U.S. has in interest in, and this is
indeed a more laissez-faire Commission on economics. But its
impact is likely to be fewer damaging new proposals rather
than changes in existing policies. On foreign policy,
however, we expect few changes in priorities.
Ferrero-Waldner is no Chris Patten, and Solana (who will
increasingly assume a role as the EU's Foreign Minister) has
made clear the Middle East is his priority. Barroso's
transatlantic perspective is likely to be helpful on tone,
but less so on substance, as he looks over his shoulder at
certain Member State governments. END SUMMARY.


2. (SBU) Commission President Barroso succeeded in getting a
strong majority of the European Parliament to approve his
Commission team, with two of his original nominees replaced,
and one pair of portfolios swapped (REF A). Still, the
last-minute controversy over the French Commissioner's
undisclosed prior conviction for embezzlement, coupled with
the EP's previous rejection, means Barroso is starting from a
much deeper hole than he anticipated. Nonetheless, we can
now draw some conclusions from the lengthy testimony by each
Commissioner-delegate before the EP over the past month and a
half. (Detailed recaps of the most important Commissioners'
testimony will be provided septel.)

POLICY CONTINUITY, RATHER THAN INNOVATION, TO DOMINATE
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3. (SBU) A change in Commission is not analogous to a change
in government in a Member State. No party or ideology has
been voted into or out of power. Thus, policy continuity,
rather than change or innovation, is the likeliest outcome.
In a conversation with Ambassador recently, one long-serving
Commissioner likened policy change in the Commission to the
difficulties of turning an oil tanker.


4. (SBU) In addition, the personnel changes brought on by a
new Commission are shallow. Only the Commissioners and their
personal cabinets change, and a considerable proportion of
both groups are familiar faces, just in new jobs. Within the
Directorates-General of the Commission, the supporting
bureaucracy remains the same. The impact of this was
particularly evident in the questionnaire responses provided
by the Commissioners-designate in advance of their hearings.
Without exception, it was clear these texts were drafted by
the relevant staff and at most lightly edited by the
Commissioners themselves. We are not aware of any instance
where an incoming Commissioner challenged current Commission
policy.


5. (SBU) Adherence to existing policy was also the
predominant theme in the Commissioners' oral testimony. This
was understandable, as staying on the well-worn path proved
to be the best strategy for avoiding controversy with MEPs, a
lesson underlined when Justice, Freedom and Security
(formerly Justice and Home Affairs) nominee Rocco Buttiglione
spoke freely about his personal views about homosexuality and
the role of women, even as he stressed that he would not
change existing Commission and EU policies on
non-discrimination protections. The firestorm that erupted
eventually led to Buttiglione's replacement by former Italian
FM Franco Frattini


6. (SBU) That said, the Barroso Commission does include some
significant personnel changes. Ten of the Commissioners,
including Barroso himself, will be brand new to Brussels.
And 11 returning Commissioners, primarily from the new Member
States, served less than a year under Prodi. The ten
Commissioners from the new Member States will begin
exercising real authority for the first time. There are
other changes as well. Seven of the new Commissioners are
women, the highest number ever. And nearly a third of the
Commissioners hail from Europe's "liberal" parties (meaning
parties generally skeptical about heavy state involvement in
economic affairs),another high-water mark.

AMONG PRIORITIES: AN INCREASED FOCUS ON THE LISBON AGENDA
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7. (C) The out-going Prodi Commission had a handful of "top
priorities" -- enlargement, introduction of the Euro,
involvement in institutional and treaty reform for the EU,
the Tampere agenda for justice and home affairs, and the
Lisbon Agenda to promote economic reform and competitiveness.
As Prodi himself has recognized, it is on the last of these
priorities that his Commission has most clearly failed to
deliver. Barroso, however, has said his Commission will have
one priority dominating all others: the Lisbon Agenda. (His
other big push will be an internal effort to improve
communications with European publics on what the EU is and
does.)


8. (C) In this context, there is some chance Barroso's
Commissioners responsible for economic issues will take a
somewhat more "liberal" (i.e., market-oriented) approach.
For example, Gunther Verheugen (Enterprise and Industry),
Stavros Dimas (Environment),and Markos Kyprianou (Health and
Consumer Protection) all made reference to the need to take
industry concerns into account when considering EU
legislation on chemicals, with Verheugen and Kyprianou noting
that the legislation should avoid harming Europe's
competitiveness. In the competition field,
Commissioner-designate Nellie Kroes hinted at more focus on
the structure of the market, and less on the size of the
firms concerned, saying distortions to competition have
nothing to do with the size of firms involved but with
whether a monopoly exists. Even Taxation Commissioner Lazslo
Kovacs, who faced opposition from the center-right EP parties
because of his Communist past, said he did not believe tax
competition per se was a bad thing. He only opposed
"harmful" tax competition, but said he did not believe there
was any evidence of a "race to the bottom" on corporate tax
rates in the EU.


9. (C) Despite these slight shifts in emphasis on the new
Commission in the areas of economic policy and regulation,
we still expect a strong sense of policy continuity. From
Peter Mandelson's testimony on trade policy to Dimas on GMOs
to Jacques Barrot on transport, the common thread has been
support for policies and legislative proposals put forward by
their predecessors. In areas of direct relevance to
transatlantic relations such as the Passenger Name Record
agreement or US-EU aviation negotiations,
Commissioners-designate Frattini and Barrot, respectively,
supported current Commission positions (although Frattini
hedged slightly by saying he wanted to see how the European
Court of Justice would rule on the PNR issue). Several
Commissioners, including Kyprianou and Charlie McCreevy
(Internal Market),also stressed the need for the Commission
to focus more on implementation and enforcement of existing
regulation, rather than introducing new legislation. Where
the "liberal bias" of the new Commission, if such exists,
might make itself visible will be in reduced willingness to
propose new legislation injecting EU-wide regulation into the
market (such as the outgoing Commission's efforts on working
time, temporary workers, or insurance discrimination).

EXTERNAL RELATIONS: EVEN MORE OF THE SAME
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10. (C) While Commission economic policy may see a limited
injection of new thinking, we forecast that Commission
attitudes on external relations policy will be more familiar.
Olli Rehn (Enlargement) indicated the Commission will remain
institutionally committed to the enlargement process,
although perhaps even more cautious than his predecessor,
Gunther Verheugen, about the political constraints within theEU facing the next
tranches of applicants: Romania, Bulgaria,
Turkey and the Balkans. Benita Ferrero-Waldner (External
Relations and Neighborhood Policy) and Louis Michel
(Development and Humanitarian Aid) both were supportive of
the EU's traditional tendency to pursue engagement as opposed
to isolation of problem countries, which is not surprising as
both have served as advocates for this approach repeatedly
during their days as FMs in the EU's Council of Ministers.
There may be slight shifts in emphasis from their
predecessors, but within the context of existing policy.
Michel, for example, has a strong interest in Africa.
Ferrero-Waldner, for her part, can be expected to pay more
attention to the EU's "Neighborhood" in both North Africa and
the former Soviet Union, in part because she no longer needs
to follow the Balkans, after that region's transfer to the
Enlargement portfolio.


11. (C) The replacement of Buttiglione with Frattini has
probably made continuity in this policy area also more
likely. Frattini's testimony before the EP hewed closely to
the existing Commission line, and was perhaps more skeptical
than even outgoing JHA Commissioner Vitorino about the value
of considering potentially controversial initiatives such as
off-shore reception centers for illegal immigrants and
refugees. In other areas, a new multi-annual program for JHA
has just been adopted (REF B),and it is certain to set the
terms for the work of the Commission in this field.

CONCLUSION
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12. (C) Our sense is that Barroso and his Commission have
emerged from their battle with the EP weakened, but not
crippled. As they assume office on November 22, they face
the challenge of whether they should now act with particular
care and attention to the EP (which the EP would love to
see),or whether they need to assert themselves by using the
right of initiative that the EU Treaties gives only to the
Commission. It will take some time to see if any trend
emerges. Those such as Trade Commissioner Mandelson or
Enlargement Commissioner Rehn, who sailed easily through the
confirmation process, are among those most likely to feel
they have a mandate to act. For others, particularly
Competition Commissioner Kroes or Taxation Commissioner
Kovacs, the instinct may be to move more cautiously.


13. (C) New priorities and initiatives within the Barroso
Commission may develop as Commissioners settle into their new
roles, and as events provoke them. But all EU institutions
(Commission, Council and Parliament) are likely to have a
very inward focus in the coming years, as the EU adjusts to
having ten new Members, debates its next five-year budget,
and struggles to ratify its Constitutional Treaty. Over
time, the new Commission team could prove slightly more
"liberal" economically and slightly less "Euro-federalist"
politically than its predecessor, with those shifts in tone
perhaps most evident in the change at the very top from Prodi
to Barroso. Barroso has so far appeared a self-confident
operator, and his keen focus on the Lisbon Agenda and
"Communicating Europe" may succeed in breathing real life
into those two, somewhat moribund, policies. But this is not
a new group brimming with new ideas or any revolutionary
vision for the Commission or the EU as a whole. They will
also have to be sensitive to how their actions are perceived
in the run-up to referenda in many Member States on the
Constitutional Treaty. Outside Barroso's determination to
emphasize the Lisbon Agenda, which could produce a new and
improved economic dynamic inside the EU, changes in policy
will be nuanced at most, and in the end, from the U.S.
perspective, even imperceptible. On balance, however, this
continuity may not be a bad thing.

MCKINLEY