This summer, Commission Vice-President Frans Timmermans told Dutch TV that the President of the European Commission Jean Claude Juncker is “fit enough to do a good job”. I have no clue about the President’s health status. But a more important and relevant question is whether or not Juncker is politically fit for the job. This is something that I sadly often find that I have to ask myself.
In his state of the union speech next week, Juncker is expected to push for more flexibility when assessing the deficit and debt of member states. Juncker wants to bend budget rules to exclude investments and educational spending from the Stability and Growth Pact. The Stability and Growth Pact is the set of budgetary rules put in place after the euro crisis. It is the backbone of the euro but also applies to member states outside the euro zone. These are important rules to ensure sound finances in the member states and to prevent new financial crises.
Now the Commission President is paving the way for the same type of tricks that created the euro crisis in the first place. Did we not learn anything from that? This would erode all credibility that has been built up in the years after the crisis. Financial stability is all about credibility and rules are made to be followed, not broken. Countries with deficits must put necessary reforms in place to restore sound finances and create the right conditions for growth. But too many socialist governments with fiscal deficits do not want to implement the necessary reforms, and call for less strict financial rules. And now Juncker seems prepared to destroy all that and meet their demands.
Juncker’s poor judgement goes back all the way to his first days as Commission President. For years, Europe’s socialists had called for more public spending as a cure for weak competitiveness and sluggish growth. They still think deficits will magically disappear if they can just spend some more public money. And in exchange for their support in the vote that made him Commission President, Juncker met them halfway. One of his first initiatives as President of the Commission was to launch the Juncker Plan to bolster investments.
It is alarming that investment levels dropped significantly after the economic crisis. We all agree on that. But public subsidies for investments do not improve the competitiveness of European industries or create the right conditions for investments. Europe needs structural reforms to be able to compete on global markets. By spreading the risk of investments to the EU budget Juncker created EU sanctioned subprime securities. Apparently we learned nothing from the American subprime crisis either.
The Commission argued that EFSI would support investments that would not materialise otherwise. First of all, one could argue that these investments are unlikely to be profitable. Because if they were, they should materialise even without public backing. Second, a new study by the economic think-tank Bruegel suggest that investments supported by EFSI actually would have been made even without the Juncker plan. The “additionality” of the fund has not been proven so far. Now Europe’s big spending socialists call for a doubling of the Juncker plan. And rumour in Brussels has it Juncker is about to meet also this demand.
What on the other hand does support growth and jobs in Europe is the free movement of goods, services, workers and capital in the internal market. Free movement is one of the fundamental principles of the European Union and something we need more of. The posting of workers directive plays an important role in ensuring the free movement of services across member states. The enforcement directive was adopted two years ago in order to prevent abuse of free movement and entered into force only this year.
This spring however, the Commission opened up the posting of workers directive after pressure from socialist governments in member states such as France and Sweden. With the Europe we have today, with nationalist populism and Brexit on top of the agenda, does anyone think this revision will give us more free movement? No, of course not! We will end up with a Europe that is less open and where movement is less free. Opening up the posting of workers directive at this point is like opening up Pandora’s Box and it can only result in a setback for the internal market. It has already opened up another divisive debate among EU member states, with national parliaments in more than one third of all member states invoking the “yellow card” opposing the revision.
This summer, Juncker prove his bad judgement goes beyond policy. In an interview with Der Spiegel, Juncker and Martin Schulz, the President of the European Parliament, appeared in a cosy, open-hearted interview. The fact that the Commission President and the President of the European Parliament agree to do an interview like this together is bad enough in itself. They come from two different political families and represent two different institutions. Has it ever occurred in any of the 28 member states that the Speaker of the House and the Prime Minister sat down like this for a cosy chit chat, with media in the room, speaking about how nice it is to hang out? Would Paul Ryan and Barack Obama do it? It is out of the question! They are from two different parties, representing two different branches of government. Ever heard of division of power? The idea dates back to 1748 and the spirit of the laws, but Juncker and Schulz seem completely oblivious to this fundamental principle of democracy.
This enforces the perception by large chunks of the electorate that politics is a power play and that Europe is governed through dirty backroom deals. Of course this is not true, but it is the perception one gets when the Commission President and the President of the European Parliament are acting that recklessly. Juncker also comes out as a supporter of Schulz as President of the European Parliament even after the mid-term review. This is completely out of the question. Schulz will be replaced in accordance to the agreemen that made him president in the first place. And this is none of Juncker’s business. My good friend and colleague Alain Lamassoure said it better than anyone “It is not the president of the Commission who elects the president of the Parliament. It is the Parliament who elects the president of the Commission.”
The bumpy ride to replace the President of the Commission may not be what Europe needs right now. But the question is when this is getting out of hand. I am starting to get more and more tired of Juncker. From time to time I even ask myself if the socialist Commissioner Frans Timmermans would do a better job. That in itself speaks volumes of the problem.