The European Commission explained
By EU regulatory and public affairs team
Q: Does the European Commission matter to business?
A: Absolutely! The European Commission has the sole right of initiative (which it jealously guards) meaning that it is the only EU institution that can propose legislation as well as initiate soft law initiatives such as recommendations, guidelines and action plans. It is responsible for ensuring member states apply EU law correctly and can bring a member state to court for failing to do so. The commission also has the power to block mergers in the EU and impose hefty fines through its world-renowned antitrust enforcement role.
What will the priorities of the next commission be?
In the next five-year mandate we expect policy to be focused on a number of business-critical areas including sustainability, corporate taxation, data and digital platforms. The commission is expected to negotiate a number of free trade agreements (FTAs) on behalf of the member states, including possibly with the US and the UK. It will also have to decide how to deal with the Franco-German push for a revamped industrial policy that would potentially result in the rise of ‘EU champions’ to compete with the likes of Chinese, US and Russian companies.
At the civil-service level, the commission directorates general are currently preparing the so called ‘briefing books’ for the new commissioners, which give them the broad political and policy directions for the new mandate.
Q: How is the commission appointed and assembled?
A: In July, member states will nominate their candidate for the president of the commission. In doing so they must take into account the European election results. For the 2014 elections, parliament introduced the system of ‘lead candidates’ or Spitzenkandidaten. The concept is that each European political group puts forward one candidate for commission president. Following the election results the political groups negotiate among themselves to give their backing to one candidate – usually the candidate from the group that returned the most MEPs. The parliament as a whole then votes on that candidate after which the EU’s heads of state will need to endorse the selection. They may choose not to back the parliament’s candidate. If this is the case, a significant concession will need to be made to the parliament if the member states are to avoid their candidate commissioners being rejected later on during their hearings with the MEPs.
In 2014 the Spitzenkandidaten process was successful and Jean-Claude Juncker, the candidate of the EPP group, which won the most seats, was appointed commission president.
The council, in agreement with the commission president-elect, then adopts a list of candidate commissioners, one for each member state. This will take place in September.
The new commission will formally take office on 1 November. In theory, the UK will be out of the EU by then and will not need to appoint a commissioner. However, this situation will have to be re-assessed if a longer extension is granted after 31 October.
It is not yet certain, but we expect a similar structure to the 2014-2019 commission to be maintained , with five vice-presidents appointed to co-ordinate the work of the commissioners in ‘policy clusters’. In 2014, these VP roles were all given to high-profile politicians (including former heads of state) of eastern and northern countries: Bulgaria, Estonia, Finland, Latvia and Slovakia.
The new commission president will face the daunting challenge of needing to balance the allocation of portfolios against the size of the member state, political background and increasingly importantly, gender. The member states will be jostling for the more influential portfolios such as High Representative of the EU (the equivalent of an EU foreign affairs minister if this position is retained in the next commission), trade, economy and finance, competition, energy and digital economy. And by bringing forward stronger candidates, ie seasoned politicians, such as former ministers or influential MPs, ideally well-known on the European political scene, member states may be able to influence their chances of getting the best portfolios. Proposing a female candidate is also an asset in an institution where women have been continuously underrepresented.
Q: What should businesses look out for?
A: The first thing to watch following the appointment of the new commission president is the allocation of portfolios and any changes to the structure of the commission itself, as this will influence how policy decisions are taken and where decision-making powers lie. The process is unpredictable, with last-minute horse-trading between member states for the top jobs and a delicate balance of competing interests to be found.
The last five-year mandate was characterised by a more political approach to law-making. In trying to be more relevant to the EU electorate, the commission also got a lot more sophisticated in communicating complex ideas and decisions to citizens and business. We expect this trend to be strengthened although it remains to be seen whether the member states give their backing to a commission president candidate that would continue the political ambitions of Jean-Claude Juncker.
It will be crucial to see whether the new president declares an intention to continue the political approach of the Juncker commission (the Christian Democrat and Socialist Spitzenkandidaten Manfred Weber and Frans Timmermans have already for example underlined that they would wish to preserve this ‘political nature’).
In October, once the parliamentary hearings with the prospective commissioners are completed and the college of commissioners is finalised, the commission president will send each commissioner a ‘mission letter’. This outlines key priorities for each portfolio and gives important indications of the work that lies ahead for them. This will be the first concrete indication of the prioritisation and the direction of the work that the new commission intends to undertake.