Brussels & Berlin | December 2019

The first woman elected to lead the European Commission took office on December 2, a month after the European Parliament settled in and a month after the presidency was intended to begin.

New Commission

Since her election, Ursula von der Leyen has laid out an ambitious set of goals to achieve throughout her five-year term, ranging from a comprehensive artificial intelligence plan to release in her first hundred days to working out more sustainable solutions to ongoing migration. However—and perhaps unsurprisingly after Greens surged in the May 2019 elections—mitigating climate change has quickly ascended to the top of the political agenda. In fact, today von dear Leyen announced her plans for a European Green Deal: “It is a green thread that will run through all our policies — from transport to taxation, food to farming, industry to infrastructure.”

Commissioner Drama

The primary reason for the delay in von der Leyen assuming the presidency was a number of contested commissioner spots. The appointment of Commissioners is always interesting to watch because the College of Commissioners is comprised of representatives from each of the member states. Leaders from the member states nominate individuals, typically members of their own party, to serve in the Commission. This can provide a prestigious bump to an individual and party alike.

The most high profile nominee to fail was Sylvie Goulard, whom French President Macron put forth as a candidate for the next Internal Markets Commissioner, a role that covers a broad range of issues, including technology, defense, and industrial policy. MEPs were tough in their questioning of Goulard, following reports that she misused EU resources to her own political benefit in France. MEPs’ inclinations have proven correct: she is currently being indicted for embezzlement of public funds. The French then successfully put forth Thierry Breton as Internal Market Commissioner, who is expected to make a major push for European technological sovereignty.

Among the other big-name commissioners, Frans Timmermans, former Dutch foreign minister and initially one of the front-runners for Commission President, will serve as vice president for the European Green Deal and will thus be in charge of a major shift toward climate change mitigation within the Union. Magarethe Vestager, also once a Commission President hopeful, retains her job as Competition Commissioner, positioning her even more strongly in the antitrust battle with big tech. Bulgarian Mariya Gabriel will serve as the Commissioner of Innovation, Research, Culture, Education, and Youth, overseeing a wide remit of policies that includes the digital economy. Another commissioner to watch is Irishman Phil Hogan, who assumes the role of trade chief. This position in particular will be diplomatically fraught amid Brexit uncertainty and potential opportunities for trade deals with the UK and U.S.

The College of Commissioners would have been gender-balanced had the original nominees all been approved, but ultimately fell short, with 15 men and 11 women. It nevertheless remains the closest the EU has ever come to a balanced Commission. Notably, too, the European Parliament voted for the Commission absent a British Commissioner—in large part to send a message to Downing Street that Brussels is fed up with the ongoing Brexit saga that has eaten away at precious time and resources.

Climate Change

When the European Parliament voted in late-November to confirm von der Leyen’s new College of Commissioners, she had wide support from the three mainstream parties in the EU—her own center-right EPP, the left-leaning S&D, and Macron’s moderate Renew Europe. However, many of the Greens abstained from voting for von der Leyen’s College of Commissioners because they remain skeptical about her commitment to resolving climate issues. In the May elections, while the center right and center left lost 80 seats, the Greens were the surprise victor. They had strong performances throughout the EU, translating to greater representation in Parliament. The Greens ultimately picked up 15 seats in Parliament and have been quick to employ their newly gained power.

Ahead of the COP25 Climate Change Conference in Madrid, the European Parliament declared a climate emergency and voted in favor of a resolution committing Europe to combating climate change. Perhaps the most ambitious goal included in this resolution is to reduce EU emissions by 55 percent by 2030.

In his recent speech at the COP 25 conference, EU Council President Charles Michel, said, “I have a clear goal: to make Europe the first climate-neutral continent on the planet by 2050. So, we will be the champion of the green transition.” He went on to describe this “New European Green Deal” (an homage to AOC, perhaps?) as a “peace treaty” with nature. The price tag on this ambitious proposal is a whopping one trillion euros—small in comparison, however, to the economic risks of climate change, which are estimated to cost nearly $500 billion per year. Ambitious agendas like these make clear that the world is no longer depending on U.S. leadership the way it once did, especially in climate policy, where the United States is currently the only developed country not supporting the Paris Agreement.

Brexit

The UK national elections to be held tomorrow, December 12, will in many ways lay the foundations of forthcoming Commission policy with regard to the UK. If the conservatives maintain their majority, then it is likely the UK will leave the EU by January 31, 2020, setting up an immediate need for the Commission to pivot toward a UK-EU trade deal in order to keep vital goods such as pharmaceuticals and produce flowing to the island. If the conservatives fail to maintain their majority, then it looks like both parties as well as third parties are back to square one.

Multilateral Leader

Speaking of London, President Trump’s December NATO meeting in the city did little to assuage international fears that Europe and the U.S. find themselves on increasingly divergent paths. Bulgarian political scientist Ivan Krastev recently wrote a searing op-ed for The New York Times, in which he wonders, “Will Europe Ever Trust America Again?” Krastev notes that “Until recently, most European leaders’ hopes were bound up with the outcome of America’s presidential elections. If Mr. Trump were to lose in 2020, they believed, the world would somehow return to normalcy….All of that has changed.” Having President Trump in the White House has indeed forced the EU to become more introspective on a number of issues, including collective defense. However, while Trump’s relationship with the likes of Chancellor Merkel and President Macron may be rocky, there is ample opportunity for a fresh start with von der Leyen, a potential conservative ally, who could help patch up the bridge between Brussels and Washington.

Under the von der Leyen mandate, the European Union will also have to play an even bigger role in maintaining the post-war multilateral institutions, including the World Trade Organization. Thus far, the Europeans and Americans have failed to reach a consensus on how to resolve the Appellate Body dispute at the WTO, leaving the body’s highest court completely disabled for the foreseeable future. Furthermore, Congressional stalemate and election season in the U.S. means that the Europeans will have the upper-hand in setting a wide range of WTO policies, including on 5G and artificial intelligence.

What to Watch

Digital issues remain at the forefront of the transatlantic relationship. They are key to understanding Trump Administration tariffs on French goods, and they play an equally important role in ongoing WTO talks. As of mid-December, U.S. Treasury Secretary Steve Mnuchin seemed to have lost confidence in ongoing OECD talks that would establish taxation principles for digital goods and services, elevating the importance of taxation as a potential source of international discord. This disagreement over digital taxes also raises the stakes in the e-commerce talks, which seek to resolve or set preliminary guidelines when it comes to regulating the digital economy.

Other major themes in Europe will be ongoing discussions regarding defense spending and the much-anticipated plan to regulate artificial intelligence. In the analog world, it remains to be seen if any meaningful trade deals will be concluded between the EU and U.S., especially before the presidential elections in November 2020. It is likely that the EU, now unencumbered by major elections, will produce substantially more legislation on these fronts in the coming months than the Americans will.

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