“Spanish Commissioner Joaquin Almunia moves from ECFIN to Competition,” says the cable, “where he will bring his economics background to touchy competition policy cases (such as Oracle/Sun) and will likely continue Neelie Kroes’s tough line on bank state aids” (Neelie Kroes is talked about later and we already know that the US called her "sensitive")
Here is the full text.
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FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW
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UNCLAS SECTION 01 OF 10 BRUSSELS 001616
SENSITIVE
SIPDIS
STATE PASS TO NSC KVIEN, BELL, AND OMB/OIRA
E.O. 12958: N/A
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade],
ECIN [Economic Integration and Cooperation],
EFIN [Financial and Monetary Affairs], EINV [Foreign Investments],
EAGR [Agriculture and Forestry], EIND [Industry and Manufacturing],
ENRG [Energy and Power], ECPS [Communications and Postal Systems],
EAIR [Civil Aviation], EWWT [Waterborne Transportation],
KIPR [Intellectual Property Rights], KSCT,
SENV [Environmental Affairs], EUN [European Union]
SUBJECT: BARROSO'S NEW COMMISSION SHOULD BE GOOD
FOR U.S. ECONOMIC POLICY INTERESTS
BRUSSELS 00001616 001.4 OF 010
¶1. (SBU) Summary: EU Commission President
Barroso's announced line-up of the policy
portfolios for the new Commission that takes
office on/about February 1 has mostly good
implications for U.S. economic policy interests:
-- New Trade Commissioner Karel de Gucht (Belgian
Foreign Minister until September) takes over the
Transatlantic Economic Council; known for his
straight-talk, de Gucht is also seen as someone
who can close deals;
-- On capital markets, Frenchman Michel Barnier
may bring a decidedly French and political
approach to the internal market and financial
services, but will be offset by a new British
Director General, Jonathan Faull;
-- Finn Ollie Rehn will bring his Oxford PhD in
economics to his new Economic and Finance
position, where he'll play a role in the G-20 even
as he tries to manage winding down member state
deficits;
-- Spanish Commissioner Joaquin Almunia moves from
ECFIN to Competition, where he will bring his
economics background to touchy competition policy
cases (such as Oracle/Sun) and will likely
continue Neelie Kroes's tough line on bank state
aids;
-- Kroes herself takes up the information and
communications technologies Q including a new ten-
year digital economy plan and telecoms
liberalization -- from Viviane Reding;
-- Climate change may be a problem with Dane
Connie Hedegaard in the lead, but environment
otherwise may be less problematic with Slovene
(and former S&T Commissioner) Potocnik;
-- Energy will be with the new German
Commissioner, Gunther Oettinger, who may try to
smooth over some of the EU-Russia tensions over
supply disruptions;
-- Estonian Commissioner Siim Kallas takes up the
transport portfolio (minus space), along with the
U.S.-EU aviation negotiations;
-- Agricultural policy goes to Romania's former
agricultural minister; this, and the shift of
biotech away from DG ENV to DG SANCO (and former
Research Commissioner Potocnik) may bode well on
biotech;
-- Industry and entrepreneurship, supplemented
with space, goes to the Italian Tajani, who will
bring a lower-profile to a portfolio now focused
on the woes of the auto sector; and
-- Regulatory cooperation is more strongly
centralized in the SecGen's office; the Maltese
Commissioner who will have the re-combined Health
and Consumer portfolio, where so many
transatlantic regulatory issues lie (food safety,
consumer protection) is well respected by the
Amcham President. End Summary.
¶2. (U) EU Commission President Barroso announced
his new Commission on Friday, November 27, just
three days after the Netherlands nominated the
last of the Commissioners-designate. The new
line-up, which goes into effect only after
extensive hearings before and approval by
Parliament in January, has significant
implications for U.S. economic policy, since the
Commission has a lead policy role in the European
Union Q itself the world's largest economy,
largest trader, largest donor and heavy-weight in
virtually all international economic fora, even
where not directly a member.
¶3. (U) Of the 27 EU Commissioners (one per member
state), 18 have portfolios with significant
economic policy content, affecting member state
fiscal policy, financial services, trade, aid,
competition policy, climate and environment,
energy, telecommunications and many other areas.
In each of these, the Commissioner proposes both
policy initiatives and EU legislation, and must
then get measures approved by the 27 member states
in the EU Council and the European Parliament
all the while negotiating or talking to us and the
many other countries affected by the EU's policy
BRUSSELS 00001616 002.4 OF 010
choices.
¶4. (U) This cable provides a brief resume of the
key economic policy Commissioners and the top
U.S.-EU issues they will handle by policy area,
divided into four themes: external (trade,
customs/taxation); fiscal/macro; "horizontal"
policies; and sector-specific portfolios
(agriculture, industry and the like). The new
High Representative for Foreign Affairs and
Security Policy, Cathy Ashton, who will also have
a significant economic policy role especially with
respect to U.S.-EU cooperation on third country
issues, is not covered here; see London 2623.
Similarly, the new Commissioners for Justice and
Home Affairs, and for enlargement and development,
will be treated separately, although all deal with
economic policy issues, including the increasingly
difficult one of data privacy.
General Assessment
------------------
¶5. (SBU) In terms of economic policy, Barroso's
apportionment of the portfolios strikes us as
being generally favorable to U.S. interests:
Barroso appears to have reinforced both his
generally liberal economic reform instincts and to
have struck a note of independence from the big
four member states. The two areas where we see
the greatest potential for problems are in
internal markets and services, where Paris appears
to have wrested for Michel Barnier the control it
sought over capital markets (although Barroso
offset this by appointing a well-respected Brit as
the new DG MARKT Director General under Barnier),
and in climate change. Interestingly, none of the
four big member states got the high-profile trade
and competition policy portfolios, which went to
the relatively strong Belgian and Spanish
Commissioners.
External Economic Policy Q Trade, Customs
-----------------------------------------
¶6. (U) The Commissioner for Trade is our key
economic policy interlocutor in the Commission.
The Commissioner, who negotiates trade agreements
on behalf of the EU and its 27 member states, is
the U.S. Trade Representative's primary European
contact, although the remit also covers other
aspects of bilateral and multilateral economic
relations. This broader role expands with the new
Commission Q President Barroso used the occasion
to assign responsibility for the Transatlantic
Economic Council (TEC) Q the U.S.-EU
"intergovernmental cabinet meeting" on economic
policy Q to the Trade Commissioner. In addition,
the Lisbon Treaty that goes into effect December 1
gives the incoming Commissioner a major new policy
area Q negotiating international investment
protection agreements, previously the purview of
the member states, anda new political headache: a
significantly inceased role for the European
parliament in trae negotiations (septel).
¶7. (SBU) Karel de Gucht, the Belgian who has been
Development Commissioner for only two months (he
replaced Louis Michel when the latter joined the
European Parliament this summer), was a surprise
choice for the Trade Commissioner position, not
least as he comes from a small member state. A
Flemish Liberal (center-right, with more free
trade tendencies), the 55 year-old de Gucht has
been Belgium's Foreign Minister for the past five
years; he also has extensive EU experience through
14 years in the European Parliament. De Gucht has
won a reputation as a straight-talker (including
with blunt statements about human rights in some
developing countries), but he's also portrayed as
politician who can reach compromises. De Gucht's
Chief of Staff, Marc Van Heukelen, an economist
who is extremely close to de Gucht and who headed
the U.S. Office in the Commission's External
Relations Department for the past two years, will
BRUSSELS 00001616 003.4 OF 010
bring a strong interest in transatlantic relations
as well as extensive experience in the TEC to the
new Commissioner.
Taxation/Customs:
¶8. (U) The Commissioner for Taxation and Customs
(TAXUD) works more with DHS and CBP on border
security issues than with Treasury on taxation,
where the EU's role is generally limited to
internal indirect taxes (VAT). Current
Commissioner Kovacs has focused in his dealings
with us on our 100 percent container scanning
requirement, but at the last TEC meeting he was
more balanced, underlining the EU's equally strong
interest in preserving the integrity of the
container system. We have a fairly good working
relationship with the Commissioner's services, DG
TAXUD, on such things as WCO rules (where the EU
has become less helpful recently) and on IPR
enforcement, where we've done a joint seizures of
counterfeit semi-conductors under Operation
Infrastructure.
¶9. (SBU) Lithuanian Algirdas Semeta may bring a
slightly more fiscal-oriented approach to the
TAXUD role. A Member of the European Commission
since July 2009, the 47 year-old Semeta graduated
as an economic mathematician from the "Faculty of
Economic Cybernetics and Finance" of Vilnius
University in 1985 and found himself Chairman of
the Securities Commission from 1992-1997 and
Minister of Finance from 1997 to 1999, a position
he held again before being appointed, in July
2009, to the European Commission responsible for
Financial Programming and Budget.
Overall Economic Policy Q ECFIN, Budget and
Regional Policy
--------------------------------------------- -----
--
ECFIN:
¶10. (SBU) The Commissioner in charge of Economic
and Finance issues helps guide EU member state
fiscal and Eurozone monetary policy, although more
through suasion than direct control. The
Commissioner lays out the broad economic policy
guidelines meant to direct member state fiscal
policy; issues warnings about, and recommends
corrective steps for, "excessive" member state
deficits; and represents the Commission in the
Eurogroup "troika" (with Eurogroup Chair Juncker
and ECB President Trichet), including in the G-20
and in IMF-related issues such as balance of
payments support. Spaniard Joaquin Almunia, the
outgoing ECFIN Commissioner, developed credibility
in this role, including in bringing excessive
deficit procedures against the UK, France and
Italy. Indeed many thought it likely Almunia
would remain at ECFIN, although this may have
become uncomfortable for him with the tough
measures ECFIN may have to bring against Madrid
for its growing fiscal problems.
¶11. (SBU) Certainly Finnish Commissioner Olli Rehn
was not the first name that leapt to mind as
Almunia's replacement, but as Enlargement
Commissioner he too has developed a reputation as
a strong character, openly disagreeing with even
big member states on such sensitive issues as
Turkey's EU accession and the Balkans. Rehn, 46,
is in the Liberal group. He was a member of the
Finnish Parliament from 1991 to 1995, and a Member
of the European Parliament (MEP) from 1995-1996,
becoming head of Cabinet for Enterprise and
Information Society Commissioner Liikanen from
1998 to 2002. Liikanen has headed the Finnish
Central Bank since Rehn became Commissioner in
2004, following a year as Economic Adviser to the
Finnish Prime Minister. Rehn, who comes into his
position representing one of the EU member states
seen as innovative, competitive and well-managed,
studied economics, international relations and
BRUSSELS 00001616 004.2 OF 010
journalism at Macalester College in Minnesota, and
has a PhD in international economics from Oxford.
The combination of Rehn's representing fiscally-
prudential Finland and his own strength of
character should help him push fiscal laggards
towards consolidation across the EU, although he
will likely also listen closely to the political
guidance of Barroso.
Budget and Regional Policy:
¶12. (SBU) At about $150 billion Euros, the EU
budget does not have much macro impact in the EU
economy Q in fact, it's explicitly limited to just
over 1.2 percent of EU GDP (while the member state
governments collectively spend closer to 50
percent) and the EU has a constitutional balanced
budget requirement. That said, EU funds and
guarantees can play an important role in EU
support for third countries, and have a
significant impact in supporting the new Central
European members (see USEU Brussels 382). And
because the budget is a zero-sum game, negotiating
any changes in it with the European Parliament can
be extremely difficult.
¶13. (SBU) In this sense, Barroso's decision to
appoint Poland's Janusz Lewandowski as Budget
Commissioner is significant. A 58 year-old
economist who was active in the Solidarity
movement and who has lectured at Harvard,
Lewandowski became Chair of the EP's Budget
Committee when he became an MEP in 2004, and by
this time knows the ins and outs, as well as the
institutional tensions, of the brief. Assigning
regional policy (the manager of the substantial
amount of the EU budget that goes to Central
Europe and other poorer regions) to Austrian
Johannes Hahn also makes sense, as Austria has a
strong interest in the health of the Central
European economies and Hahn will also wield the
funds that go toward rural development, an
important consideration for the Austrian
agricultural sector. Hahn, who has a doctorate in
Philosophy and who often goes by the nickname
"Gio," has served as Austria's Federal Minister
for Science and Research since 2007.
Horizontal Policies Q Competition, Internal
Market, S&T, Climate, Environment, Health and
Consumer Affairs
--------------------------------------------- -----
-
¶14. (U) The main "horizontal" EU economic policies
are competition, internal markets, research and
development, environment, health and consumer
protection (as well as labor and education, but
these two policy areas are not considered in this
cable), all issue areas of increasing importance
to transatlantic economic relations.
Competition:
¶15. (SBU) The Competition Commissioner is
generally seen as the most powerful economic-
policy person in the Commission behind the
President, as this is the one area where the
Commission has autonomous power. Current ECFIN
Commissioner Joaquin Almunia thus joins a long
line of well-known predecessors: Neelie Kroes,
Mauro Monti, Karel van Miert, Sir Leon Brittan and
Peter Sutherland to name the most recent. Many
of these fought and won highly-publicized battles
with U.S. giants (Microsoft, Intel, Oracle, Sun,
GE, Honeywell, Boeing) over the impact of mergers
or dominant positions in the EU market, but they
have been equally tough on many top European
firms. More recently, the Competition
Commissioner has also played a key role in
ensuring that massive state aid flowing to
European banks and other firms (including General
Motors) in the wake of the crisis do not distort
competition, often ordering remedies that could,
for example, decrease the EU presence in U.S.
BRUSSELS 00001616 005.4 OF 010
financial service markets.
¶16. (SBU) As an economist and Commissioner who has
been deeply engaged in the EU response to the
financial and economic crisis, Almunia, 61, is
certainly well-versed in many of these issues. He
is expected to take a lower-profile on many of the
competition and state aids cases, and his presence
may well help strengthen the voice of the Chief
Economist in DG COMP (potentially to the benefit
of U.S. firms under scrutiny). Before coming to
Brussels, Almunia was twice a Minister in Felipe
Gonzalez's Socialist government, and indeed led
the party for three years, standing unsuccessfully
for Prime Minister in 2000. Some wonder whether
he won't be softer on state aids given his
political past, but his job is to ensure bigger
member states don't support their industry to the
disadvantage of weaker. And, as one of the older
Commissioners, he may not anticipate returning to
political life.
Internal Markets and Financial Services:
¶17. (SBU) The Internal Markets portfolio was among
the strongest when the then-European Community
implemented the Single Market; with enlargement a
considerable amount of its authority has seeped
away to other sectoral Commissioners. It remains,
however, the voice to be reckoned with in the
Commission on Financial Services and the EU's
response to the financial crisis. Once seen as a
"liberal Anglo-Saxon" on capital markets
regulation, in the aftermath of the financial
crisis current Irish Commissioner Charlie McCreevy
demonstrated that Commissioners as politicians can
and will over-ride their professional services,
and a number of the Commission's proposals on
hedge funds and private equity, derivatives and
capital requirements have created frictions with
Washington, London and New York. In fact,
McCreevy is reported to have gone around the
Commission in getting the EP to propose an
amendment on derivatives that essentially forced
the industry to "volunteer" to commit to a central
clearing party platform.
¶18. (SBU) Michel Barnier, a French conservative
MEP who has served as Foreign Minister, EU
Minister and EU Commissioner (1999-2004), is no
stranger to Brussels or European politics. Nor is
he a stranger to transatlantic economic issues
as French Agriculture Minister in 2008, he created
the political backlash that defeated a Commission
proposal to finally end our long-standing "chicken
wars." Barnier does, however, seem a bit of a
stranger to the financial services portfolio, and
France's intense lobbying to have its Commissioner
take this up implies Paris may try to take a more
hands on approach through Barnier. This is
undoubtedly one reason why Barroso announced, when
answering questions about this assignment, that he
would assign the highly-respected Jonathan Faull,
now Director-General for Justice and Home Affairs,
to head DG MARKT under Barnier. Both men are
likely to bring a strong emphasis on general
services liberalization and IPR protection to DG
MARKT, another area of critical interest to us.
Research, Innovation and Science:
¶19. (SBU) The Research, Innovation and Science
Commissioner oversees the EU's 50 billion euro
Seventh Framework Program as well as its network
of Joint Research Centers. It is the main
counterpart for the extensive U.S.-EU Science and
Technology Agreement, has close ties to virtually
all USG scientific agencies, including NSF, NASA,
DOE and others; the Commissioner sits on the U.S.-
EU Energy Council established at this month's
U.S.-EU Summit.
¶20. (SBU) Shifting the S&T portfolio to McCreevy's
Irish successor, Maire Geoghegan Quinn, is
immediately appealing given Ireland's reputation
BRUSSELS 00001616 006.2 OF 010
(now somewhat tarnished) as a "tiger" economy with
substantial U.S. high tech investment. (Indeed,
Geoghegan Quinn was reportedly once a member of
the Board of the Ganley Group, a generally high-
tech private-equity investor owned by anti-Lisbon
Treaty activist Declan Ganley.) Geoghegan-Quinn
will bring to the Commission nearly ten years on
the EU Court of Auditors, where she gained in-
depth insights into the workings of Commission
Programs, including the Research Framework
Programs. A well-known Irish politician,
Geoghegan-Quinn, 59, became the first female
member of the Irish cabinet in 1979, and was
subsequently Minister for Tourism, Transport and
Communications and for Justice before retiring
from political life in 1997. Some of her actions
reducing sentences may come up in her EP hearings.
Climate:
¶21. (U) Although he announced some weeks ago that
he would create a "Commissioner for Climate
Action" to reinforce the EU's intention to achieve
its ambitious "20-20-20" greenhouse gas reduction
goals, Barroso used the naming of his new
Commission to spell out what this means,
transferring to the new Commissioner most of the
climate change division of DG Environment. The
Commissioner's responsibility is explicitly cross-
cutting, working most closely with the
Commissioners of Energy and the Environment.
¶22. (SBU) And Barroso could not have signaled the
seriousness of his intent more clearly than by
appointing Dane Connie Hedegaard to this position.
Now Climate and Energy Commissioner of the Nordic
country, Hedegaard has the government's lead
preparing the December Copenhagen meeting of the
parties to the UN Framework Convention for Climate
Change, COP-15. Globally well-known (one of
Time's Top 100 newsmakers for 2009), Hedegaard,
49, is seen as a dynamic if media-hungry
politician, who may run into conflicts with those
in the College who see a need to be more
"realistic" in transforming the European economy.
(These intra-college tensions will ensure that
Barroso and his Secretary General retain
considerable influence over climate policies.)
Embassy Copenhagen notes that while Hedegaard has
been a sometime critic of U.S. climate policy, she
is conversant with U.S. domestic climate politics
and has excellent personal climate contacts on the
Hill. She has been willing to engage
constructively with the Embassy and U.S.
officials.
Environment:
¶23. (U) In ways, the EU focus on climate change
has overshadowed many of the other aspects of DG
Environment, which, like the EPA, is a major
regulator in Europe, proposing legislation and
regulations on chemicals, energy-efficiency,
biofuels sustainability, pesticides, air and water
quality and many other areas of direct relevance
to U.S. exporters and companies invested in
Europe. While splitting out climate change from
DG ENV may not be to the liking of Director
General Karl Falkenberg, it may help provide much-
needed political attention to these other areas.
¶24. (SBU) In this sense, the appointment of
Slovene Commissioner Janez Potocnik to the post of
Environment Commissioner should be positive for
us. An economist, the 51-year-old Potocnik has
done well as Science Commissioner over the past
five years, and has demonstrated a strong
transatlantic leaning, including when he co-signed
a letter in Science magazine with the head of the
National Institutes of Health on joint funding for
U.S.-EU health research projects. Whether he
wants or is able to bring a bit more sanity to the
EU's chemicals regulation Q REACH Q remains to be
seen.
BRUSSELS 00001616 007.8 OF 010
Health and Consumer Affairs:
¶25. (U) Science at times has also been lacking in
the EU's approach to consumer safety, in
particular with respect to food safety, where
political perceptions of public desires have often
held sway despite scientific evidence.
Nonetheless, key U.S. regulatory agencies like the
Animal and Plant Health Inspection Service, the
Food Safety Inspection Service, FDA, the Consumer
Product Safety Commission and the Federal Trade
Commission have established good working relations
with their EU counterparts in this and other areas
of regulation, including pharmaceuticals, medical
devices and consumer safety and information. This
despite the fact that their main EU counterpart,
DG SANCO, has had to report to two different
Commissioners since responsibilities for it were
divided between two Commissioners, now Vassiliou
and Kuneva, with enlargement in 2004.
¶26. (SBU) We expect these transatlantic regulatory
relationships to continue to grow under the new
Commissioner, John Dalli of Malta. The
reunification of health and consumer safety under
one Commissioner has been generally welcomed in EU
consumer circles, and Dalli, although unknown to r
Europe, may be a good chief. Certainly this is
the view of the current President of Amcham EU,
Malta's Ambassador to the EU before he joined
General Electric and now Microsoft, who knows
Dalli well. Malta has, however, not been an ally
on new food technologies in the past Q notably
generally opposing biotech approvals; a similar
political dynamic in her Cypriot constituency led
the previous SANCO Commissioner to be less than
courageous in supporting science over perceived
public opinion. Dalli, 61, now Malta's Social
Policy Minister with responsibility for health has
held numerous other cabinet positions in the
Maltese government, including as Minister of
Finance, Foreign Relations, and Economic Affairs.
He too may face tough questioning in the EP for
old allegations of misconduct on government
contracts; his ties to Libya may also present
concern.
Sectoral Policies
-----------------
Agriculture:
¶27. (U) The agricultural sector consumes nearly
half of the EU budget, including an expenditure on
subsidies that has long been a thorn in the side
of U.S.-EU trade relations. This proportion has
been sliding as the EP Q long without a voice over
this part of EU spending Q whittled it away in
favor of internal policies. The Lisbon Treaty,
however, finally gives the EP co-decision over
agricultural spending with the member states,
adding a major new political twist with which the
new Agricultural Commissioner Q and we -- will
have to contend.
¶28. (SBU) Of the Commissioners available to him,
Barroso was right in telling the press that the
new Romanian Commissioner, Dacian Ciolos, is the
best qualified for the agricultural portfolio.
Before becoming Romania's Agricultural Minister in
late 2007, Ciolos, a 40 year-old horticultural
engineer, was Romania's representative on the EU's
sub-Ministerial Special Committee on Agriculture
and the Ministry's Under Secretary for EU affairs.
He has also worked in DG AGRI, and spent about 8
years in the 1990s working on agriculture and
rural development in France. This French
connection disturbs some, especially from the UK,
but Ciolos is also seen as someone extremely
interested in modernizing and bringing science to
the sector.
Industry and Entrepreneurship:
BRUSSELS 00001616 008.10 OF 010
¶29. (U) Now headed by German Guenther Verheugen,
the Enterprise and Industry portfolio in the
Commission has been on the decline; Barroso
accelerated this considerably in his Friday
announcement by saying the pharmaceutical, medical
devices and cosmetics units, as well as the
European Medicines Agency, would shift to DG
SANCO. DG ENT was dealt additional blows by
losing its hold on the remainder of the Better
Regulation dossier, which has shifted to the
Secretary General's office,as well as Verheugen's
lead over the Transatlantic Economic Council.
This in many ways leaves a rump directorate that
will be focused primarily on dealing with the woes
of the auto sector, as well as "entrepreneurship".
The weaker Commissioner will still have to play a
key role in trying to support the interests of
industry in ensuring EU regulation is not overly
onerous, especially on smaller businesses.
¶30. (SBU) Italian Antonio Tajani, now Commissioner
for Transport, is at best moving laterally; some
feel the shift to Industry may be a demotion. The
56 year-old Tajani, after 15 years in the European
Parliament, is not seen as having had much impact
in the Commission, although to be fair he has been
there only seven months (he replaced Franco
Frattini when the latter became Italy's Foreign
Minister). Tajani, a career soldier journalist
and politician is close to Berlusconi and was at
the creation of the Forza Italia. DG ENT staff
are not convinced he can bring a new dynamism to
the Directorate.
Transport:
¶31. (U) The Transport Commissioner position Tajani
leaves is immediately important to us as the U.S.
and EU are negotiating the "second stage" of our
Open Skies agreement the first half of 2010.
Transport will be made into its own Directorate-
General, with the half that reported to Tajani
splitting from energy. The new Directorate
General will also oversee the European Aviation
Safety Agency, the European Railway Agency, the
European Maritime Safety Agency and the Trans-
European Transport Network Executive; it will lose
control over state aid decisions in the sector,
which will go to DG COMP. The road and rail parts
of Transport, although not now high in our
bilateral relations, may become more so with
increased U.S. interest in Europe's high speed
rail (Transport Secretary LaHood explored this
when he visited Europe in May and November, and
Federal Railroad Administrator Szabo was here two
weeks ago) and EU interest in our experience with
intelligent traffic management systems.
¶32. (SBU) The new Transport Commissioner, Estonian
Siim Kallas, 61, does not bring much specific
background to the post, but the former President,
Foreign and Finance Minister of the small Baltic
republic has built a reputation among ranking
Commission officials as a shrewd operator,
including in his oversight of the rotation of
senior Commission posts.
Maritime Affairs and Fisheries:
¶33. (U) Responsible for the Integrated Maritime
Policy and the Common Fisheries Policy, this
Commissioner is charged with balancing the
economic potential of the oceans and seas with
protecting the marine environment and meeting the
needs of coastal communities. It works closely
with the European Environmental Agency. Guiding
the Integrated Maritime Policy in the fields of
spatial planning, comprehensive marine research
and data collection, maritime surveillance, along
with economic and political concerns of the
Baltic, Mediterranean, and Arctic regions requires
a deft touch with other EU Services and agencies.
Managing the competing economic and environmental
demands of European fisheries, and the highly
charged political interaction with Member States,
BRUSSELS 00001616 009.2 OF 010
is an unenviable task.
¶34. (SBU) Putting a Greek in charge of anything
having to do with maritime affairs, as Barroso has
done with his nomination of Maria Damanaki, will
certainly bring an interesting dynamic to the
portfolio, and indeed to the College of
Commissioners. The issues that affect the
shipping industry are critical to Athens, and
Damanaki is apt to focus on commercial shipping,
as current Maltese Commissioner Borg does. A 57-
year old chemical engineer who became active in
the fight against the Greek Junta, her personality
may mesh well with Siim Kallas', helping reduce
the struggles between MARE and Transport. In
fisheries, she is likely to support France and
Spain with a continued focus on the economic
problems of the EU fishing fleets rather than on
conservation efforts, increasing US concerns about
managing endangered species and magnifying our
difference on quotas for bluefin tuna and other
commercially valuable catches.
Energy:
¶35. (U) Energy and energy security have loomed
large on the EU policy radar since the January 1,
2006 cut-off in Russian gas deliveries to Ukraine.
EU powers in this area, however, have been
limited: while it promoted internal energy market
liberalization through Single Market mechanisms,
the EU only gets the right to act on external
energy security issues with the Lisbon Treaty.
Barroso clearly wants a greater focus on this
issue, and used the announcement of Commissioner
portfolios to confirm that DG Transport and Energy
would be split into two, with energy under the new
German Commissioner, Gunther Oettinger.
¶36. (SBU) Oettinger, now Minister President for
the state of Baden-Wurttemberg, was named
Germany's Commission candidate in October despite
any European bona fides. Many, including in the
German community in Brussels, were disappointed in
the nomination, saying Merkel wanted only to get a
poorly performing Oettinger out of a critical
electoral state. This may be one reason Oettinger
was not given a more significant role. This,
coupled with Germany's dependence on Russian gas,
its opposition to a common energy market, and
Oettinger's statements that the Commission "not
exceed it competencies," raises questions about
how hard he will push to diversify Europe's gas
supply. Oettinger has a background in law and
economics. He entered the Baden-Wurttemberg
assembly in 1984 and became minister-president in
2004. As minister-president, he increased Baden-
Wurttemberg's 2020 renewable energy targets to 20%
- consistent with EU legislation, but observers
note Baden-Wurttemberg's wind production is well
below the EU's average. Baden-Wurttemberg is also
home to auto manufacturers Porsche and Daimler.
Information Society Q now "Digital Agenda":
¶37. (SBU) The Digital Agenda/Information Society
portfolio has grown steadily in importance, as the
sector has expanded its weight in the EU economy.
The new Commissioner will oversee finalizing a 10-
year EU "Digital Agenda" to replace the i2010
program, in outlining the specific policy actions
needed to position the EU ICT market for the next
decade. The Digital Agenda will focus on
strengthening the EU ICT single market and using
ICT to boost economic growth and recovery. A
major task will be implementation of the newly
passed EU telecoms regulatory reform Q including
launching a new EU regulatory agency, expanding
the Commission's competition powers over the
sector and improving spectrum management. The
Digital Agenda will also cover improving broadband
access and quality, digital content, and continued
responsiveness to consumers.
¶38. (SBU) With a growing portfolio, Competition
BRUSSELS 00001616 010.4 OF 010
Commissioner Neelie Kroes' shift to Digital
Economy can be seen as lateral, though in practice
her influence will likely wane. Kroes is a strong
transatlanticist whose extensive business
credentials led to surprise when she aggressively
pursued competition cases against major U.S. ICT
firms, EU energy firms, and a number of cartels
during the first Barroso term. Kroes' extensive
familiarity with the U.S. ICT sector should be a
plus, especially given her recent make-up with
Microsoft. She has the potential to make major
headway toward an integrated EU ICT market and
will closely monitor telecoms incumbents for
market abuses and to protect consumers' rights.
Kroes likely will continue the tradition of close
consultation with the U.S. she developed as
Competition Commissioner, though with new U.S.
agencies.
Comment
-------
¶39. (SBU) Barroso had little choice over whom the
member states would appoint to serve with him in
the College of Commissioners, and he was pushed by
all 27 capitals to give one portfolio or another
(six, for instance, reportedly vied for Energy).
¶40. (SBU) Given these constraints, Barroso has
done a good job. Some capitals will be concerned
(Nicosia, potentially Rome), and some portfolios
will probably cause problems for us, but in the
main the assignments look generally positive for
U.S. interests and transatlantic relations.
¶41. (SBU) The Commissioners, however, will all
grow into their portfolios in the coming weeks,
not least as they go through extensive hearings
through January before a stronger, and more
activist, European Parliament intent on
demonstrating its populist credentials. We do not
discount the likelihood that some of the
candidates noted above may have to withdraw before
the January 26 vote on the College, as happened in
2004. In this event, however, the portfolios are
unlikely to change.
¶42. (SBU) Given this need for confirmation, it may
be premature to reach out now to formally
congratulate the candidates, especially those who
will be new to the Commission. That said, early
contact after confirmation, and early meetings
next year, can only help smooth transatlantic
cooperation across the swathe of U.S.-EU economic
policy issues.
MURRAY
If Bill Gates can control this system, he then 
