MacroScope

We need to talk about Juncker

By Mike Peacock
June 9, 2014

Swedish Prime Minister Fredrik Reinfeldt will host Germany’s Angela Merkel, Britain’s David Cameron and Dutch premier Mark Rutte at his private residence over two days to discuss reforming the EU and ”achieving a more efficient EU that is focused on creating jobs and growth”. 

After EU elections delivered strong returns for far-right and far-left parties, EU leaders say they have recognized the need to refocus on what matters to their people. But at the same time, the orthodox camp is determined to keep bearing down on debt and the bloc’s heads are arguing over who should take the top jobs in Brussels which set the tone.

Cameron is publicly opposed to Luxembourg’s Jean-Claude Juncker, who he regards as an arch federalist, becoming European Commission President though as the candidate for the centre-right EPP group of  parties which came top in the election he is in pole position.

IMF chief Christine Lagarde, who would have been favoured by Britain, ruled herself out of the running on Friday.
Both Rutte and Reinfeldt are believed to harbour doubts about Junker too but Cameron is struggling to build a blocking minority. The man who could tip the balance is Italy’s Matteo Renzi, travelling in Vietnam and China this week.

Cameron faces another headache. His pulled his Conservative members of the European Parliament out of the EPP group because it was too much in favour of further EU integration and set up his own group, which has quietly welcomed in the anti-euro True Finns and the far-right anti-immigration Danish People’s Party into the fold.

Many will look askance at those bedfellows and this week he will also face a decision over Germany’s anti-euro AfD.

The AfD are not extreme but Cameron is pinning his hopes on Merkel to give his attempts to renegotiate Britain’s place in the EU a fair wind and cannot afford to annoy her. The Conservatives don’t have an overall majority in their ECR group so they could be outvoted and there is every chance that his MEPs will ignore him and sign up the AfD anyway.
If so, what would Cameron do? Pull out of the ECR? But where then? He couldn’t conceivably rejoin the EPP given what his backbenchers think about the European project.

It never rains… Cameron has also been forced to quell open civil war in his cabinet with two of his most senior colleagues, interior minister Theresa May and Education Secretary Michael Gove blaming each other, and briefing against each other, about Islamist influence in the schools system.

And then there’s the phone hacking trial of former Rupert Murdoch lieutenants Rebekah Brooks and Andy Coulson. The jury could be asked to reach a verdict as soon as today and if they find guilty, Cameron’s decision to appoint Coulson as his former communications chief will come under sharp scrutiny.

Ukraine’s newly-installed President Petro Poroshenko is set to remake a governing team which will handle the crisis with Russia, with talks on gas prices on Monday providing an early test of his new relationship with Vladimir Putin.

The United States and EU have urged Moscow to recognize Poroshenko and work with him or risk a tougher round of sanctions although the will in Europe to go further down a punitive path remains in doubt. There are some signs of a thaw. Putin and Poroshenko held their first face-to-face talks on the sidelines of a D-Day anniversary event in France last week and discussed a possible ceasefire agreement in Ukraine.

However, Poroshenko’s insistence that Ukraine’s future lies with Europe and that he will forever consider Crimea to be part of his country won’t please the Russian president, while separatists in the east refuse to be cowed.

This evening’s talks in Brussels – featuring EU Energy Commissioner Guenther Oettinger, Russian Energy Minister Alexander Novak and Ukrainian Energy Minister Yuri Prodan – aim to resolve a gas dispute which, if unfixed, could lead to Moscow suspending supplies to Ukraine and through there into Europe, which relies on Russia for almost a third of its energy needs.

According to government sources, Kiev is considering paying off debts for last year’s supplies. The two sides differ on how much is owed by Ukrainian state energy company Naftogaz. Ukraine has said its debt for 2013 and 2014 stood at $2.2 billion as of April 1. It paid $786 million last week. Russia’s Gazprom says Ukraine owes it a total of $4.46 billion.
The heads of Gazprom and Naftogaz will take part in today’s talks.

Iranian, U.S. and European Union officials will start two days of talks in Geneva about Tehran’s nuclear programme. Iranian Deputy Foreign Minister Abbas Araqchi said the meeting would also discuss sanctions that have damaged the OPEC member’s oil-dependent economy.

Nuclear talks between Iran and six major powers in Vienna ran into difficulties last month, with each side accusing the other of having unrealistic demands in negotiations aimed at curbing Tehran’s atomic program in exchange for an end to economic sanctions that have crippled its economy. That raised doubts over the prospects for a breakthrough by a July 20 deadline. 

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