US embassy cable - 04BRUSSELS4959

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 
------- 
 
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 
--------------------------------------------- --------- 
 
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 
--------------------------------------------- ------------ 
 
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 
------------------------------------------ 
 
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 
---------- 
 
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