DUTCH CELEBRATE CAPTURE OF EU COMPETITION PORTFOLIO

UNCLAS SECTION 01 OF 02 THE HAGUE 002040

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON PREL PGOV PINR NL EUN
SUBJECT: DUTCH CELEBRATE CAPTURE OF EU COMPETITION PORTFOLIO

REF: THE HAGUE 01955

SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE ACCORDINGLY.


1. (SBU) SUMMARY. The Dutch are clearly satisfied and
claiming victory over the appointment of Neelie Kroes-Smit
(Kroes) as the new European Commissioner for Competition.
Prime Minister Balkenende's strategy of holding out for a
"heavy" portfolio appears to have paid off. Both the
Netherlands' and Balkenende's image are likely to get a boost
from this success. Kroes' reputation as a free-market and
pro-Atlantic thinker could be a real plus for soothing
tensions in the U.S.-EU relationship as well as opening a new
era of dialogue between Brussels and big business operating
in the EU. END SUMMARY.


2. (U) The Dutch press is hailing the appointment of former
Transport Minister Neelie Kroes-Smit as the new European
Commissioner for Competition as a real victory. All August
13 Dutch morning papers included front-page stories on the
appointment of Kroes, who comes from an entrepreneurial
Rotterdam family that founded a transport business in the
Netherlands. (See reftel for further biographic
information.) Most commentators acknowledged surprise but
also satisfaction with new European Commission President
Barroso's selection of Kroes for the prized job of regulating
mergers and acquisitions within the European Union as well as
state subsides. Spokespersons for all major political
parties have praised Prime Minister Jan Peter Balkenende for
his "subtle" negotiating strategy and success in winning for
the Netherlands what Liberals (free-market,conservative VVD)
Lower House Leader Jozias van Aartsen called a "dream
portfolio for a dream candidate." (Kroes is a VVD member.)
Christian Democratic (center right CDA) spokesperson Maxime
Verhagen spoke of winning the "top prize." Even the main
opposition Labor (PvdA) spokesperson Frans Timmmermans, who
had previously questioned Kroes' nomination by Balkenende and
predicted that she would receive a less important portfolio,
conceded his mistake and complimented Balkenende's cabinet
and Kroes on the nomination.


3. (U) Jacques Schraven, President of the influential
VNO-NCW Employers organization also praised the "outstanding
lobbying" of Balkenende, noting the importance of Kroes'
position for establishing more "direct lines" for business
and its boost for the Netherlands' image. Other reports
describe Barroso's appointment of Kroes and others as giving
a larger role to smaller member states within the EU,
injecting new life into an "ailing European economy," and
acknowledging the Netherlands position as the largest net
contributor to the EU. Balkenende himself told the press
that he was "very satisfied," describing Kroes' new job as a
"core portfolio" in the Commission and her appointment as
recognition of the key role the Netherlands has and will
continue to play in the EU. In an August 12 press conference
shortly after the announcement, Kroes pledged to maintain
good contacts with The Hague while not becoming a
"figurehead" for the GONL in Brussels.


4. (U) Former Belgian Commissioner for Competition Karel
van Miert, who also previously held the Transport portfolio,
publicly advised Kroes that the job's main challenge would be
to maintain her independence while also proving her knowledge
of business and her ability to judge issues objectively and
coherently. Van Miert praised Kroes, who had served as an
advisor to Miert in the early 1990s while he was Transport
Commissioner, for her energy and strength, noting that her
formidable negotiating skills would serve her well. He also
implied that the anti-trust case against Microsoft, brought
by outgoing Commissioner Mario Monti, could be a real test of
her abilities, especially if the European Court of First
Instance agrees to Microsoft's request to overturn Monti's
decision. The Director of Microsoft Netherlands Michel van
der Bel refused to comment to the press on the case, but
noted that the company had had good relations with Kroes in
the past, including the granting to Bill Gates of an honorary
doctorate from Nyenrode University during Kroes' tenure as
President there. (Kroes is also likely to inherit the task
of reaching final settlement of the Commission's five-year
anti-trust case with Coca-Cola.)

COMMENT -- AT THE TOP IN BRUSSELS
--------------


5. (SBU) Balkenende's August 3 nomination of Kroes as the
Dutch candidate for European Commissioner was initially met
with some skepticism among political circles as well as
annoyance with current Dutch Internal Market Commissioner
Frits Bolkenstein's decision not to opt for a second term.
VVD leadership actually decided in June to put Kroes forward
as a candidate and subsequently reached agreement among the
three coalition parties VVD, CDA, and Liberal Democrats
(center left D66) not to name a particular candidate until
Balkenende was able to negotiate for a "heavy" portfolio.
Kroes apparently was always the front-runner, although
Agriculture Minister Cees Veerman was an alternative for the
Agriculture portfolio in the event that Balkenende's strategy
failed. Balkenende reportedly first raised the issue with
Barroso during a Netherlands-Germany soccer match during the
July European Championship in Portugal and the discussion
continued during Netherlands-Portugal game. Barroso
continued to ask Balkenende for a female candidate, while
Balkenende maintained that such an option was only possible
if the Netherlands received a "heavy" financial-economic
portfolio. On Tuesday afternoon, August 3, Barroso made that
promise by telephone, whereupon Balkenende announced the
nomination of Kroes.


6. (SBU) Balkenende's strategy appears to have paid off.
Both the Netherlands' and Balkenende's image, both
domestically and internationally, are likely to gain from
this success, which comes on the heels of the selection of
Jaap de Hoop Scheffer for the prestigious NATO SYG post.
Meanwhile, both domestic and international press are lauding
Kroes as a free-market and pro-Atlantic thinker, whose
occupancy of the "most important" EU Competition job could
help to calm tensions in the U.S.-EU relationship and open an
era of dialogue between Brussels and wary big business. END
COMMENT.
RUSSEL