July 01, 2019
The questions we will be asking tomorrow
By the time you read this, the European Council may have reached a deal. Or not.
The events of the last few days raise questions that will not be answered today - more important than who gets what. The first issue is what the process so far is saying about the leadership of the EU itself, and the effectiveness of the broad centrist coalition. The wrangle on the spitzenkandidaten is an indication that it is much harder to build large cross-party coalitions at EU level than at national level. We have written before the the loss of the cosy EPP/SD duopoly in Brussels and Strasbourg is highly significant because many of the decision-making structures that developed in the last few decades are no longer viable in the new context. That goes for the spitzenkandidaten, a German concept tailor-made for the German political system; but also the Osaka-style government by directorate, to which other member states objected to; and the assertiveness of the previously-compliant parliamentary groups themselves.
The second is where does the decision leave the ECB. It faces two primary challenges: to regain the traction of monetary policy it has lost since the crisis, and to have a strategy in place to act as a lender of last resort in the next crisis. We don't think the OMT, ingenious as it may have been in 2012, is the way forward. Has the European Council really given any thought to what the next ECB president should do - as opposed to whether the person should be French or German, or man or woman?
The third issue is the political fallout in Germany. We all note that Angela Merkel is no longer the dominant force in European politics that she once was. It looks like Angela Merkel is not fighting any more. One of the German news reports said she could live with all the candidates under discussion. And we don't get the sense that she is pushing for Jens Weidmann either. She seems oddly deflated - even beyond what we would have expected after she announced her decision to step down as leader.
Last night, German television commentators were in shock when they suddenly realised that Merkel had given up on Weber as Commission president. On Saturday, FAZ contemptuously spoke that Weidmann might get the ECB job as a consolation prize for Merkel's failure to deliver Weber. We would not consider the ECB as a consolation prize. But Germany might not get the ECB job either.
In Brussels, the debate is how to allocate the five jobs between candidates fulfilling various criteria. What is not sufficiently understood in Brussels is that outside of their own little fishbowl people don't care so much about the minor jobs - the high representative, the EP presidency, and even the presidency of the European Council. The latter is more of a co-ordinating than agenda-setting role. We think all these jobs are important. But they all fade in comparison with the ECB and Commission presidencies. A trade-off is interpreted outside the fishbowl differently from inside the fishbowl.
We fear that Federico Fubini (@federicofubini) is right with his glum tweet this morning: that the EU is drifting; and that the centre does not hold.