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New EU Commission head striving to make his mark By Shadaba Islam Jose Manuel Barraso, the new head of the European Union's executive commission, is moving fast to put his personal stamp on the bloc's agenda. In a series of key policy papers released in recent weeks, the former Portuguese premier has said he wants to make growth and jobs the top EU priority for the next five years. And in contrast to traditional EU turf wars between the commission and national governments, Barroso says he wants to achieve this by cooperating rather than fighting with EU governments. Barroso's economic manifesto makes common sense to most outsiders. Growth in the bloc is not expected to be much higher than 2 per cent this year. Jobless rates are high and most countries are in breach of the eurozone stability pact rule that budget deficits to be kept under 3 per cent of Gross Domestic Product (GDP). At the same time, many countries are lagging behind in meeting deadlines to dismantle monopolies in key industries. Labour market reform remains slow and painful, including in Germany, France and Italy, the three key eurozone economies. The commission chief wants to inject new momentum into Europe's efforts to become more competitive, with the focus on ensuring that the bloc keeps up with its key rivals, including China. He wants to tackle the reasons for slow EU growth and insists that governments must come up with fresh ideas to create up to six million new jobs. But Barroso's blueprint - co-authored with European industrial affairs chief Gunter Verheugen - is stirring strong passions in Brussels and other EU capitals. The conservative Portuguese politician has been denounced as an "ultra-liberal" by centre-left politicians who say he is putting business ahead of Europe' long-standing commitment to high social and environmental standards. Adding to such anxiety, Verheugen has said that recently agreed EU guidelines on safe chemicals which are under fire by the industrial sector for pushing up production costs, will be reviewed. Barroso's centre-right allies, meanwhile, worry that some of his ideas to promote Europe's industrial base could end up encouraging protectionism and incite governments to give wasteful state subsidies to so-called national champions. The commission chief's main focus is on reviving and updating the four-year old plan for revitalizing EU economies known as the Lisbon agenda. The blueprint is in deep trouble, with governments lagging seriously behind in meeting their pledges to open up their economies, cut red tape and encourage research and innovation. But while in the past, the commission has taken countries to task publicly by "naming and shaming" governments that failed to comply with the bloc's market-opening laws, Barroso's new strategy is to work hand-in-hand with member states to improve competitiveness. The new plan does not mention the original Lisbon target date of 2010 for transforming the EU into the "world's most competitive economy." Also initial warnings that the 25 nation bloc's flagging economies are falling behind the United States have been replaced with references to the emerging economic power of China. Barroso's message is that the EU needs to get its economic house in order in a bid to keep up with competition from China's vast array of industrial exports. "Very soon China will be a real competitor for Europe - not just in high tech products but also for cars and in the aerospace sector," says an aide to Barroso. If the EU cannot fight back, its economic future will be bleak. The strategy is in contrast to the more confrontational stance taken by the former commission led by Romano Prodi who alienated several EU leaders including German Chancellor Gerhard Schroeder by demanding that governments comply with EU environmental rules, clamp down on subsidies to banks and industries and keep to eurozone fiscal rules. In fact, Schroeder specifically asked Barroso to give Verheugen the new job of looking after EU industries. Barroso is hoping that his strategy for what he describes as "unleasing Europe's economic potential" will become the bloc's next great project, on a par with earlier ground-breaking moves to create a frontier-free single market, introduce the euro and EU eastward expansion to embrace the former communist nations of central and eastern Europe. But critics say the new blueprint lacks vision and is unlikely to inspire either European public opinion or national authorities. Many member states, struggling to preserve a generous welfare state in the face of ageing populations and slow growth, will probably continue to resist and resent attempts by the commission to steer them along the path of reform. There is also another key problem. As seasoned EU watchers know only too well, the head of the bloc's executive commission can identify problems, craft solutions and set out lofty policy goals to be followed by governments. But he often lacks an effective enforcement mechanism to make sure that governments keep their promises. Barroso may have set a new agenda for Europe. But its success will depend on governments' readiness - or not - to take action. Please Visit our Sponsor (Ads open in separate window)
