US embassy cable - 04THEHAGUE2040

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