The new Commission’s economic philosophy By Katinka Barysch, Charles Grant, Simon Tilford and Philip Whyte ★ The new team of European commissioners may not be quite as enthusiastic for free markets as the outgoing team, but the broad orientation of the Commission’s economic policy is unlikely to change. It will continue to defend the single market, free trade and a tough competition policy. ★ However, the economic policies of the Commission and the EU as a whole will inevitably reflect the economic backdrop of slow growth and high unemployment. National governments – and the European Parliament – may therefore push the Commission to be less liberal and more ‘social’. ★ There is a risk that the Commission will bow to pressure to allow state aid for ailing national champions; to restrict trade with third countries that fail to open their markets; or to impose illconceived regulations on financial firms. ★ One key challenge for the Commission is to help prevent Greece or another eurozone member defaulting on its debt. Another will be to draw up a convincing ‘EU 2020’ programme of economic reform, to replace the ‘Lisbon agenda’. A third challenge will be to reconcile pressure from memberstates for more activist industrial policies with a defence of the single market and adherence to an independent competition policy. A fresh approach to industrial policy, a determined fight against ‘social dumping’, narrowing the pay gap between men and women, and social impact assessments for new EU laws – these were some of the things that José Manuel Barroso promised when the European Parliament approved his second term as president of the European Commission in September 2009. Is this the same Barroso who had made the ‘Lisbon agenda’ of liberal reforms and a stronger single market the priorities of his first term in 2004? Barroso’s altered rhetoric is not the only reason why some observers worry that the new European Commission, which took office on February 9th, will be less economically liberal than its predecessor. In the previous Commission, the key economic jobs were held by North European liberals: Neelie Kroes ran competition policy, Charlie McCreevy defended the single market and Peter Mandelson fought for trade liberalisation. Particularly in its early years, Barroso’s first Commission (Barroso 1) pursued a broadly liberal economic agenda. It proved a tough enforcer of competition policy, and tried hard to free up trade and lighten the regulatory burden on
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business. But what can we expect of the new team now settling into the Commission’s Berlaymont headquarters in Brussels? Fewer of the key jobs in Barroso 2 are held by North European economic liberals. Joaquín Almunia, a Spanish socialist, gets competition policy and Michel Barnier, a French Gaullist, takes the single market – though Karel de Gucht, a Flemish liberal, becomes trade commissioner. The increasingly important energy portfolio, previously held by a liberalising Latvian, Andris Piebalgs, goes to Günther Oettinger from Germany – a country traditionally opposed to energy market liberalisation. Agriculture shifts from a reform-minded Dane, Mariann Fischer Boel, to Dacian Ciolos, a Romanian who has described France as his “adoptive country”. The leanings and leadership qualities of individual commissioners matter. But several other factors will be more important in shaping the economic stance of the new Commission. The first is that EU commissioners act within a well-defined legal and institutional framework. Irrespective of what commissioners may think, treaty obligations require
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