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2014 CHANGEOVER COUNTDOWN Merkel and Schulz joining forces? Member States in exchange for financial support in terms of bail-out funds. However, the Social Democrats (SPD) know that a “grand coalition” with Ms. Merkel’s Christian Democratic Union (CDU) is unpopular among their supporters and are pushing a leftwing agenda to ensure support from their SPD base. On top of that, the SPD is letting its 470,000 members vote on whether to approve a coalition contract, and is flirting with the idea of forming a “red” coalition with Die Linke (The Left) and the Greens as an alternative. 25/11/2013 There are some interesting dynamics at play amongst the European institutions, especially as concerns the appointment of the European Commission president. The 2009 Lisbon treaty has given more powers to the European Parliament (EP). However, at the same time, the economic crisis seems to have in many ways reinforced the power of the European Member States and the European Council - or, to be more precise, it has strengthened the position of its biggest Member State, Germany. This tactic aimed at putting pressure on the CDU, has had partial success. News of coalition negotiation compromises all seem to be going the SPD’s way. These include the introduction of a federal minimum wage, and the lowering of the German pension age (now at 67) to 63 for certain groups. At the same time, the SPD’s hard bargaining means the coalition talks have been progressing painfully slowly, with the target date of 27 November for agreement seeming increasingly unlikely to be met. There is also the chance that the CDU concessions will not be enough to appease the SPD grassroots supporters raising the spectre of failed negotiations and months of political paralysis and perhaps new elections. As well as being bad news for Germany, this would be most unwelcome in the rest of Europe. After winning a third term with a record number of votes, Angela Merkel - who will probably soon be in coalition government with Germany's second-biggest party, the Social Democrats (SPD) - is, to quote The Economist, “Europe's dominant politician.” But how will Ms. Merkel use this authority in Europe and will this influence the “power balance” between the European Institutions? These questions are especially relevant with an eye on the upcoming European elections and the ensuing formation of the new European Commission, where many people envisage the European Parliament playing a much bigger role than before. According to Der Spiegel, Ms. Merkel is convinced that she is currently in a position to reform the European Union – a project that she hopes will cement her political legacy. She intends to do this by continuing with her controversial policy of demanding reforms of 1 2014 CHANGEOVER COUNTDOWN Art. 17.7 of the Lisbon treaty For now, however, the most likely scenario remains a CDU/SPD compromise. On the EUlevel this will probably lead to spending more on growth programmes and additional powers for Brussels, although no ground-breaking initiatives should be expected here. Nonetheless, these European policies are controversial even within the CDU. Ms. Merkel’s possible support for Mr. Schulz is the latest twist in the lead up to the “election” of the European Commission president. Under the Lisbon Treaty Article 17.7, the European Council must, for the first time, “take into account” the European Parliament election results when proposing a candidate for European Commission president. The European Parliament will then appoint the European Commission president proposed by the Council by a majority of its component members. If the candidate does not obtain the required majority, the European Council has to propose a new candidate within one month. Ms. Merkel therefore needs an ally. The Chancellor could have found this person in European Parliament president, Martin Schulz - the Party of European Socialists (PES) candidate for the European Commission presidency. Mr. Schulz is also chairing the group discussing European policy in the coalition negotiations with the Christian Democratic Union (CDU) and its Bavarian sister party the Christian Social Union (CSU). Although Mr. Schulz denies that the European Commission president job is on the agenda during the coalition negotiations, some say a deal on this could end up being part of the final coalition agreement. This is a highly plausible theory, since both parties agree on an agenda based on austerity and growth. However, is it possible to envisage Ms. Merkel supporting a Commission president candidate ahead of the European Parliament elections, who is not from her political family, the European People’s Party (EPP)? Perhaps we will have to await the outcome of the elections before the battle lines really become clear. The exact meaning of “take into account” remains unclear, but many, including Mr. Schulz, foresee a significant role for the European Parliament in the selection process. Building upon this idea, the European Commission has recommended that European political groups nominate a candidate for the Commission presidency. From its side, the Parliament adopted a Resolution in July this year calling on European political parties to put forward their candidates early enough for them to conduct a Europe-wide campaign and to hold public debates with other nominees. This non-binding Resolution also includes the expectation that the European Council will first consider the candidate from the party with the most seats in the European Parliament. 2 2014 CHANGEOVER COUNTDOWN The Party of PES Candidate European Martin Schulz, Socialists (PES), president of the the second European Parliament European party in number of seats in the current European Parliament, has responded more willingly to the European Commission proposal and will propose its candidate during a Congress in February 2014. The European Parliament's PES leader and current EP president, Mr. Schulz, is certain to be elected, as he was unopposed in the selection procedure. The party candidates – the EPP not willing to nominate The main contender for becoming the biggest party in May next year is without a doubt the centre-right European People's Party. The EPP has said it will announce its candidate for the European Commission presidency at a conference in Dublin on 6-7 March 2014, but things seem to be more complicated than they appear. First of all many possible EPP candidates [see box] are currently in public office. It remains to be seen if they would give up their current position, simply to become a “candidate”. Moreover, many leading European conservatives are against nominating a candidate, with European Council president, Herman Van Rompuy, saying it is “not the panacea for Europe’s credibility woes”. Even more importantly, as indicated above, it could be that Chancellor Merkel wants to keep some room for manoeuvre to select her own candidate. - The third Possible ALDE Candidates and fourth - Guy Verhofstadt, the parties in leader of the ALDE group the current - Olli Rehn, EC vice president European in charge of economic and Parliament, monetary affairs the Liberal ALDE party, and the Greens, are very unlikely to win the elections (at least in an absolute sense), but appear most enthusiastic about nominating a candidate. ALDE will announce its candidate at a special Electoral Congress on 1 February 2014, in Brussels. It is likely that Mr. Guy Verhofstadt, the leader of the ALDE group in the European Parliament, will seek nomination. Mr. Olli Rehn, the European Commission's Vice president in charge of economic and monetary affairs, could also possibly be in the running. Meanwhile, the Greens are organising an open Europe-wide Online Primary to select their two leading candidates for the post of Commission president in the 2014 European Elections. Possible EPP Candidates Manuel Barroso, current EC president Dalia Grybauskaitė, President of Lithuania Donald Tusk, PM of Poland Fredrik Reinfeldt, PM of Sweden, Jyrki Katainen, PM of Finland Enda Kenny, PM of Ireland Valdis Dombrovskis, PM of Latvia Christine Lagarde, IMF managing director Commissioner Viviane Reding (DG 3 2014 CHANGEOVER COUNTDOWN could possibly support a centre-left candidate. Potential candidates include MEPs, Mr. José Bové (France), Ms. Rebecca Harms, (UK) and Ms. Ska Keller (Germany), and former MEP, Ms. Monica Frassoni (Italy). - What is more, Eurosceptic parties may well win over 20% of the vote in next year’s European elections, making finding a majority for the Commission president candidate inside the Parliament very difficult. Possible The Greens Candidates José Bové, MEP Rebecca Harms, MEP Ska Keller, MEP Monica Frassoni, Italian politician, former MEP Will this mean that the idea of European parties nominating a candidate for the European Commission presidency is destined to fail? Not necessarily. Apart from the EPP, the biggest European parties have endorsed Article 17.7. Moreover, the rise of Eurosceptic parties could convince many that a further democratisation of Europe is urgently needed to counter the often heard criticism that the EU suffers from a democratic deficit. "Other complications" How likely is it that the candidate from the most successful political group in the 2014 European Parliament elections will in fact succeed Mr. Barosso? In reality, it seems far from certain. Ms. Merkel’s desire to keep her options open and a lack of enthusiasm on the part of the EPP to nominate a candidate, are not the only factors that must be taken into account. On the other hand, it is doubtful if this consideration will outweigh the scepticism of the European government leaders, and Ms. Merkel in particular, about ceding the power to appoint Commission presidents to MEPs. Watch this space! Another problem could be the lack of a clear political majority in terms of governments inside the European Council. The new Czech government most likely will be Social Democrat, and the ALDE government leaders 4