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Published: Friday June 13, 2014 MYT 2:35:03 PM
Updated: Friday June 13, 2014 MYT 2:36:32 PM

Jean-Claude Juncker - Federalist danger man or skilled fixer?

BRUSSELS (Reuters) - Four months ago, Jean-Claude Juncker would have struggled to have his name recognised in much of Europe. Now he could be forgiven for wishing people would shut up about him.

As the top candidate of Europe's largest centre-right political group, which won the European elections last month, the former prime minister of Luxembourg is in pole position to become the next president of the European Commission.

While Britain's David Cameron is adamantly opposed and The Sun tabloid has described him as "The Most Dangerous Man in Europe", Juncker remains on track to secure the powerful post, which has influence over policy from telecommunications to banking and trade affecting 500 million Europeans.

Cameron's opposition is based on a belief that Juncker, 59, is an "old-school federalist" wedded to the concept of "ever closer union", not a modernizer who will shake up and refocus Brussels institutions regarded in London as bloated and opaque.

After an election in which millions of Europeans voted for far-right or protest parties, with resentment widespread over immigration, unemployment and low growth, Cameron is determined to force a rethink about how the Commission works.

German Chancellor Angela Merkel and most EU leaders agree that sharper priorities need to be set for the Commission, whose 25,000 civil servants have seen their responsibilities grow from mostly economics, trade and agriculture into areas such as culture and education, health and foreign affairs.

While Merkel has given resolute backing to Juncker, saying he is the right person to lead the Commission for the next five years and ensure it delivers on jobs, growth and prosperity, Cameron takes the polar opposite view.

The question, then, is whether the heavy smoking deal broker who got his first ministerial job at 29 is the best choice at a time when Europe is battling to keep its economic recovery on track, faces geopolitical tension with Russia and is confronting rising social and political opposition to "more Europe".

And whether, as the 12th president of the Commission since the post was established in 1958, Juncker would represent continuity or a break with the past.

POLITICAL FIXER

Unlike some of the EU's founding fathers, Juncker has never set out his own doctrine of European integration.

The son of a Luxembourg steelworker who often says he would never have been able to study law and get ahead if his father had not had job security, Juncker stands somewhat to the left of the EU's centre-right mainstream.

For example, he supports a minimum wage in all EU countries.

But his record is more that of a practical operator, making the EU plumbing work by brokering crucial compromises between Germany and France on economic and monetary union.

He negotiated the bloc's original budget rules in the 1997 Stability and Growth Pact and an amended rulebook in 2005 after Berlin and Paris broke the deficit limits and froze the pact.

For most of the euro zone debt crisis - perhaps the biggest challenge the EU has faced since its founding in the 1950s - he was at the heart of decision-making.

As chairman of the euro zone's finance ministers and a prime minister, he lead negotiations or sat in every critical meeting from the first word of Greece's problems in 2009 to the concluding decisions on banking union in 2013.

It was exhausting work and took a toll on his health. Critics said his chairmanship was at times erratic and decisions sometimes lacked follow-up.

His Dutch successor criticised his drinking and smoking in meetings. Juncker denied any alcohol problem.

At the peak of the crisis in 2011, he grew frustrated with the media attention, confessing he preferred "secret, dark debates" to the bright lights of news conferences.

In an effort to stop leaks at one meeting of finance officials in Luxembourg, a Grand Duchy of just 500,000 people that he governed for 19 years until July 2013, Juncker warned participants that their telephones could be monitored.

To some critics, his approach suggested a man concerned more to do whatever it takes to get a deal than with the niceties of openness and modern government.

Former staff members describe him as liking nothing more than locking himself in his study to work the phones, and say he only ever wants one or two trusted people around him.

"He's old-fashioned and a bit secretive in the way he works," says one former adviser. "He doesn't even like the idea of having a cabinet," he said, using the French term for a private office staff. "It's not something he was to used in Luxembourg."

By contrast, running the European Commission entails having a team of up to 25 advisers to handle a host of policy portfolios, not a one-man job. The president must also travel widely and make several speeches a week, something Juncker is loath to do unless he has penned them himself.

"He hates giving speeches he hasn't written," said the former staffer. "There are a lot of things you are forced to do as Commission president that are not really up his street."

POLICY PLANS

Then there is the critical question of policy priorities.

In his manifesto, Juncker pushed all the right buttons, talking about jobs, growth, energy diversification and trade, as well as the need to further reform Europe's monetary union.

But when he outlined how he sees the relationship between the Commission and the European Central Bank, and how he would handle future financial rescues, he raised some warning flags.

In the fourth point of his five-point plan, he praised ECB President Mario Draghi for helping save the euro, before adding that the euro zone should be managed by the Commission, which should also have a say in exchange-rate policy.

"The responsibility of the Eurogroup includes issues related to the exchange rate. We should not forget this in case the euro exchange rate should increase further and become a problem for growth," the manifesto says.

The EU's governing treaty allows euro zone finance ministers to set exchange rate policy guidelines for the central bank at the Commission's recommendation, but in practice the euro has floated freely since its creation and monetary policy is the sole preserve of the ECB.

Juncker's position could be seen by some as unhealthy meddling in free markets.

He also argued that future bailout programmes should go through a "social impact assessment" not just a fiscal analysis.

That may cheer voters in Greece, Portugal and Spain who were angered by austerity conditions attached to their bailouts. But it pits Juncker against Merkel and others who argue it was right to set strict terms for financial help.

The manifesto also talked of a "targeted fiscal capacity" for the euro zone - a nod to some sort of shared budget or fiscal transfers that Cameron and other north Europeans are concerned would take Europe in the wrong direction.

"It's just not where we see Europe going," says a British diplomat. "His philosophy is outdated. It's out of touch."

Juncker has in the past supported the idea of euro zone bonds - the issuance of jointly guaranteed debt by euro zone governments - an idea that Merkel strongly opposes. He backed away from that during the campaign, saying conditions will not be ripe in the next five years.

His commitment to the EU treaty goal of "ever closer union", especially among the 18 countries that share the euro, worries those outside the currency area as it could cement a two-tier EU, exacerbating tensions between the "ins" and "outs".

OUT OF STEP?

While Juncker's principles may put him at odds with Cameron, they are not out of step with past Commission presidents such as France's Jacques Delors or Italy's Romano Prodi, who made the case passionately for more Europe.

But after the existential crisis of the past four years and last month's vote, Cameron and his allies argue there can be no "business as usual". Another Commission president in the same mould - the third from Luxembourg - is not the way to enact change, they contend.

Added to that, Juncker clashed bitterly with Britain in 2005 over the EU budget, leaving resentment on both sides.

As a result, Cameron has made clear he will do what he can to stop Juncker, and he may yet succeed.

Sweden, Hungary and the Netherlands largely agree that the Luxembourger is not the right person to modernize the Commission. If Italy were to lean Cameron's way, it might convince Merkel that Juncker's candidacy is not going to work.

EU leaders will meet on June 26-27 to discuss the issue, but it is unlikely to be resolved by then. Instead, it may not be until September or October that the fate of Juncker, and with it the future direction of the EU, is determined.

(Writing by Luke Baker; Editing by Paul Taylor)

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