EU Leaders Fail Again to Agree on Top Jobs in Setback for Merkel

(Bloomberg) -- European Union leaders failed for the second time in 10 days to agree who would take the bloc’s top jobs, frustrating investor hopes for a swift decision and reinforcing a perception of deep division and paralysis.

Talks that lasted for more than 18 hours on Sunday and Monday couldn’t build enough momentum among the 28 leaders behind a proposal to make Dutch Socialist Frans Timmermans the head of the EU Commission, the bloc’s executive branch. Leaders will resume their efforts on Tuesday morning in Brussels, extending the marathon negotiations into a third day.

“Every time you think you are close to a deal, something happens that makes it impossible,” Luxembourg’s Prime Minister Xavier Bettel said after the meeting. “That’s why we want to have more time to have further talks and so tomorrow we will reconvene.”

Timmermans, who had been backed by German Chancellor Angela Merkel, was opposed by many leaders in her center-right EPP group, who saw her backing for a socialist candidate for the bloc’s most powerful job as a capitulation to demands by French President Emmanuel Macron. Several Eastern European leaders and Italy were also unhappy with her proposal, agreed last week on the sidelines of a Group of 20 summit in Osaka, because of Timmermans’s tough stance against populist governments.

In some ways, the failure to reach consensus reflects a European political landscape that has become more fragmented after elections in May. The two dominant political groups, the EPP and the center-left S&D together lost 10 percentage points of the seats in that election, and they need the backing of Liberals to garner a majority required for the EU Parliament to approve whoever EU leaders nominate for the presidency of the EU Commission.

A deal on the commission, which proposes rules and supervises the EU’s vast single market, is seen as a precondition for an agreement on the other top jobs which become vacant this year, including Mario Draghi’s successor at the ECB.

The European Council of leaders may also find it has less room to maneuver as the EU parliament will choose its next leader in coming days, a post that had been part of the complex equation of backroom dealing. That was the reason leaders decided to continue their meeting on Tuesday, before the assembly returns from its European elections recess.

Internal Backlash

At the outset of Sunday’s Summit, Bulgarian Prime Minister Boyko Borissov and Croatian Prime Minister Andrej Plenkovic had echoed outgoing EU Parliament President Antonio Tajani’s misgivings about a socialist executive. Borissov later worked to reach a compromise.

Who is to be the successor to Mario Draghi at the ECB was not formally discussed, so as not to further contaminate already difficult talks, even though France made clear it eyes the job for a female French official.

“I don’t remember such a case before, except when we discussed Greece, but then there was a real crisis - now we’ve created the crisis,” Borissov said after the meeting.

--With assistance from Jonathan Stearns, Ian Wishart, Jan Bratanic, Patrick Donahue and Slav Okov.

To contact the reporters on this story: Milda Seputyte in Vilnius at mseputyte@bloomberg.net;Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net;Stephanie Bodoni in Brussels at sbodoni@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo

©2019 Bloomberg L.P.