Von der Leyen’s pitch: continuity, but also renewal?
On the face of it, President-elect Ursula von der Leyen’s team, as proposed last week, represents a continuity with the Juncker era. Of the 9 most senior posts in the new College, 6 have been given to members of the 2014-2019 Juncker Commission. Two heavyweights stand out: Margrethe Vestager taking a lead on business issues in her double role, coordinating competition and digital policy and Frans Timmermans, tasked with delivering “the European Green Deal”. Concrete proposals, including on how to make Europe “the first climate-neutral continent”, are expected in the first 100 days of the new mandate. How come we mention this is the very first sentence?
Digitisation and sustainability are clearly the top priorities for this mandate but the Commission can also be seen to be responding to the results of the European Parliament elections. There the Greens - proponents of the sustainability agenda - and the Liberals - the proponents of the digital agenda – both made gains. Von der Leyen clearly made a conscious effort to bring the Commission closer to the electorate by addressing key current citizens’ concerns. As she underlined in her press conference, this Commission will also focus on the “deeper issues that have led to a loss of faith in democracy - people who have been left behind by transition, by changes in infrastructure, people who see that children leave their home and cities in search of opportunities elsewhere”.
She has tried to reflect this by changing the names of the policy areas that the Commissioners will be responsible for: ‘An economy that works for people’, ‘Democracy’, ‘A stronger Europe in the world’, ‘Values’. This certainly marks a shift from EU jargon. However, it is still to be seen if the underlying policies will also change.
What is clear though is this Commission’s geopolitical drive, which is a change of focus from the Juncker Commission. Von der Leyen stated unequivocally that this will be a ‘geopolitical Commission’, as opposed to the ‘political’ one under its previous head. And with this she responds to what many see as growing threats from third countries - the US, where established partnerships under Donald Trump seem increasingly weakened, and China, which is trying to establish its own path as a credible alternative to the more traditional EU-US led global order. Von der Leyen wants this Commission to be solution-driven and to be the “guardian of multilateralism”.
Where does the power sit for business policy?
Putting together a new ‘College’ is no easy task and requires careful balancing of political, geographical and gender concerns, whilst at the same time reflecting the results of the European Parliament elections.
Von der Leyen is the first ever Commission President to live up to the promise of a gender balanced College with 14 men and 13 women and is herself the first ever female Commission President. And what is more, she has given some of the most powerful portfolios to prominent female politicians.
In terms of the balance of power between European political groups, the Socialists have a slight advantage with a majority of Commissioners (10 in total). The Christian Democrats, who took a beating in the EU elections, follow with 9 Commissioners. The Liberals of ‘Renew Europe’ managed to obtain key portfolios such as Competition and Digital (Denmark), Energy, Values and Transparency (Czech Republic) – issues at the core of the Liberals’ political DNA, which will allow them to advance their political priorities. And whilst there is only one Green Commissioner (Virginijus Sinkevičius from Lithuania: ‘Environment and Oceans’), the electoral success of the Greens is clearly represented in von der Leyen’s agenda on sustainability.
For businesses, the interesting question is who will be their chief regulators. And all the signs point to Margrethe Vestager, the Commission’s incumbent competition Commissioner. Not only did she retain her Competition portfolio – something unprecedented in the history of the Commission – but she has also been appointed Executive Vice President (EVP), overseeing “a Europe fit for the digital age”. This gives her overarching powers on a wide number of issues ranging from Europe’s strategy for an industrial future to artificial intelligence and digital tax.
Interestingly, von der Leyen’s instructions in the ‘Mission Letter’ to Vestager specifically state that “while fully preserving the confidentiality of competition procedures”, she will be expected to “proactively share any relevant general market knowledge within the Commission, notably in the digital sector” in order to ensure that “the new legislative proposals contribute to fair and open competition in the single market and support evidence-based policymaking”. Some journalists have already questioned whether this super-digital portfolio, coupled with competition responsibilities, constitutes a possible conflict of interest.
To assist Vestager in delivering these digital priorities, von der Leyen appointed French Liberal Sylvie Goulard as Commissioner for Internal Market. In practice, Goulard will be one of the most influential Commissioners in the new College as she will oversee no less than three powerful Directorates-General: DG Internal Market, Industry, Entrepreneurship and SMEs (DG GROW), a new DG Defence Industry and Space and DG Communications, Networks, Content and Technology (DG CONNECT). The latter will help her lead the work on issues touching many areas topical for business: Blockchain, high-performance computing, algorithms, data-sharing and -usage tools, 5G networks and artificial intelligence.
This complementarity of responsibilities between Vestager and Goulard clearly makes them the power couple on anything digital, and many other areas relevant to business in the next term. The way forward will however very much depend on how successful their cooperation is on a personal level. They are both strong women from the same party, and they are both close to French President Macron. That should help them unify around specific policy decisions.
But we should not overlook other Commissioners who will also be influential. First EVP Timmermans will lead all the work on the European Green Deal: another portfolio which will have repercussions for companies across all areas of business. And EVP Dombrovskis, who, while retaining responsibility for financial services, is tasked with delivering “an economy that works for people” in an enhanced version of his previous role. Three EVPs with two hats each.
The influence of von der Leyen herself remains to be assessed, especially now that she has surrounded herself with these three powerful EVPs, all experienced operators in the Brussels policy arena. A lot will also depend on the political skills of the members of her Cabinet, whom are still to be formally appointed.
How to navigate the new structure?
Von der Leyen’s effort to balance the many (conflicting) interests at stake has increased the structural complexity of the machinery. The Juncker Commission had clusters, with a team of Vice-Presidents, assigned per policy area. The structure of this new Commission however, is a lot less easy to understand.
Von der Leyen herself said that it is “a structure that focuses on tasks, not hierarchies” and that “depending on the topics, the Commissioners will work in different clusters”. In practice though, it is hard to see which exactly are the policy teams and how they will work together.
For instance, some Commissioners have been appointed Vice-Presidents but without any Directorates-General (DGs) to do their bidding. These include Greek Commissioner-designate Schinas, responsible for the controversial portfolio “protecting our way of European life” and Maroš Šefčovič, responsible for “Interinstitutional relations and Foresight”. Other candidates will only be portfolio Commissioners, but will actually supervise several DGs, such as Sylvie Goulard or Virginijus Sinkevičius (DG ENVI and DG Fishery). In addition, some EVPs have two full-time jobs, like Vestager, who is leading EU work on digital in all areas, while remaining Competition Commissioner – how will she do this in practice?
As a result of this, we expect that the administrative levels will be more important than ever. The Cabinets of the Commissioners will play a key role – we already see telling appointments by Timmermans and Vestager, who both chose a political heavyweight to lead their team. It will be interesting whether cabinets will become bigger as well, to cover all the areas of a Commissioner’s responsibility. Similarly, Director-Generals will be key players. Will individual top civil servants play a more political role, sometimes stepping in on behalf of Commissioners who are otherwise engaged? The Commission’s Secretariat General has always been a place of power. But will it have a critical role in making sure there is coordination within the College and especially between the many VPs?
One conclusion is inevitable: it will be increasingly hard to navigate the Commission’s corridors of power. And ultimately a lot – progress or political gridlock – will depend on the personal relations between the Commissioners. Our team which specialises in the politics and dynamic of Brussels law-making will continue to watch developments carefully and assist clients understand and engage with the European agenda effectively.
Check out our most recent podcast on "Europe decides: the new EU Commission’s agenda" here.
"The story of the next five years is going to be Europe trying to define itself more clearly as a bloc, whether that’s on industrial policy, defence, trade, competition policy or the environment. President von der Leyen’s appointments and proposed new structure should be seen through this prism." - Lord Jonathan Hill (Freshfields Senior Adviser and former EU Commissioner)