Vestager Is Out of Place in the New European Order

(Bloomberg Opinion) -- Margrethe Vestager is almost certainly the current European Commission’s brightest star. Paradoxically, though, her chances of landing a big job in Brussels after this year’s European Parliament election look slim. If she is left out in the cold, it will be one of the first tangible signs of a new, post-Brexit order in the European Union – one jointly imposed by Germany and France. 

European commissioners, one from each of the 28 member states, aren’t, as a rule, well-known outside the Brussels bubble of functionaries, lobbyists and journalists. Vestager, however, has become famous thanks to the massive antitrust fines she has imposed on U.S. tech companies, among them Google, the biggest corporate spender on EU lobbying. “She really hates the U.S.,” President Donald Trump told Commission President Jean-Claude Juncker last year. Along the way, she has earned a reputation as the most fearless tech regulator in the world.

Polls of people familiar with Brussels politics consistently put Vestager at, or near, the top of the list of potential contenders for Juncker’s post once he vacates it this year. Last year, a VoteWatch Europe survey of 1,000 members of the Brussels bubble put her in second place after chief Brexit negotiator Michel Barnier. (He, it later transpired, is out of the race because he wants to finish the Brexit process rather than run a campaign.) Earlier this month, a “European Commission Scoreboard” put together by communications firm Burson Cohn & Wolfe, one of the biggest EU lobbyists, based on a survey of 1,769 professionals “from Brussels and beyond,” gave Vestager the highest popularity ranking of all Commission bigwigs, including Juncker. The scoreboard described her as “smart, tough, articulate and empathetic.”

Vestager's chances of keeping her Commission job, however, are undermined by the politics of her home country, Denmark. There, her Social Liberal Party is in opposition and Prime Minister Lars Lokke Rasmussen is no fan of hers. Tradition holds that the ruling coalition appoints the country’s EU commissioner. The prospects for Vestager’s party being in the next government after the country’s parliamentary elections in June are murky, too.

That makes running for the top Commission post her best shot at keeping her Brussels apartment, on which, as she told Politico in a recent interview, she hasn’t yet terminated the lease. But here, too, the politics are complicated.

Vestager’s party is a member of ALDE, the liberal grouping in the European Parliament which opposes the system for appointing the Commission president that put Juncker in the job in 2014. Under the Spitzenkandidaten system, Europe’s main political parties nominate candidates for the job and the parties with the best results in the elections to the European Parliament lay claim to the commission's leadership, seeking support from member states' national leaders. Unlike the other parties, ALDE has refused to field a lead candidate, proposing instead to run with a whole list of leaders, likely including Vestager. The idea, then, would be to try to put together a majority behind one of these candidates – but that looks unlikely to be successful given bigger parties will be pushing their own top choices.

Until recently, Vestager’s best chance came from the rumored support of French President Emmanuel Macron, whose party has shown a preference for joining ALDE after the European Parliament election. But then, on Feb. 6, Vestager gave Macron a powerful reason not to back her: She killed the proposed mega-merger of Germany’s Siemens AG and France’s Alstom SA’s rail businesses, which would have created a “European champion.” The decision flew in the face of an emerging Franco-German consensus to change Europe’s competition rules to fight back against China’s state-backed champions. The two countries’ economy ministers, Peter Altmaier of Germany and Bruno Le Maire of France, set out this joint vision in a recent manifesto.

Vestager, for her part, has said she sees no point in changing competition or state aid rules: It would make more sense, in her opinion, to use trade and investment barriers against state-subsidized Chinese companies in Europe rather than make EU rules more Chinese. That’s an unpopular view in both Paris and Berlin. The joint industrial policy initiative lies at the core of the two countries’ emerging blueprint for running Europe. Having an independent-minded star politician from a small country at the head of the Commission would risk undermining the Franco-German tandem.

It’s hard to see German Chancellor Angela Merkel backing Vestager over Manfred Weber, the German lead candidate of the EPP, the center-right group that includes her own party. The current German view of the competition commissioner was best described by an angry tweet from Siemens Chief Executive Officer Joe Kaeser last month: “It must be bitter to be technically right but to do everything wrong for Europe.”

It’s almost as difficult for Macron to back any candidate, and perhaps especially Vestager, without consulting with Merkel. Juncker has prided himself on running a political Commission unafraid of taking a partisan stand. Its successor is going to be political in a different sense: It will have to take into account the emerging politics of Franco-German dominance as well as the balance of forces in parliament.

The EU is a rules-based bloc, and Vestager has been a stellar enforcer of the rules as they stand, unafraid to take on the most powerful interests in the world. But the focus after Brexit will be about reshaping the rules to make the EU more competitive against the U.S. and China. That will mean, among other things, creating more formidable obstacles for the U.S. tech players in the form of digital taxes  and more rigorous enforcement of privacy and copyright regulations.

Vestager’s vision of a more competitive market within the EU is at odds with that goal. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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