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There was no reshuffle in the highest ranks of the European Commission on Tuesday, just a shuffle.
Commission President Ursula von der Leyen tapped Executive Vice President Valdis Dombrovskis as the EU’s new trade commissioner, a post that he was already filling in an acting capacity. And von der Leyen selected Mairead McGuinness, a veteran member of the European Parliament, as the new Irish commissioner, putting her in charge of financial services and stability.
By leaving the trade portfolio in the hands of Dombrovskis, a former Latvian prime minister and one of the Commission’s best-known and well-respected officials, von der Leyen demonstrated her trademark preference for steady stability over any disruption — creative or otherwise.
The resignation last month of Phil Hogan, who was caught up in a scandal over alleged violations of coronavirus travel restrictions back home in Ireland, had set Brussels aflutter with rumors of a major shake-up in the EU’s upper echelons.
Vacancies in such high-level posts are rare and can present risks when the politics of the EU’s top jobs are so finely balanced. But Hogan’s departure also presented an easy opportunity for von der Leyen to recalibrate her team if she wanted. Some commissioners were clearly relishing the chance of a promotion to a higher-profile role. Von der Leyen, however, opted for maximum continuity, and the least possible distraction from her agenda — responding to the coronavirus crisis, and pushing for sweeping reforms to combat climate change and advance digitalitzation.
Indeed von der Leyen stressed those top policy goals in announcing her decision on Tuesday morning and praising the lengthy experience that Dombrovskis and McGuinness will bring to their roles.
“Valdis Dombrovskis will assume responsibility for the trade portfolio and he will remain the Commission’s representative on the Eurogroup alongside Commissioner Gentiloni,” von der Leyen said in a no-nonsense statement that lasted all of a minute and 52 seconds.
“Mrs. McGuinness has significant political experience on EU issues, having been an MEP since 2004 and currently holding the post of first vice president of the European Parliament,” von der Leyen said. “This experience is crucial in carrying forward the EU’s financial sector policy agenda and ensuring its supports, and strengthens the Commission’s key priorities, notably the twin green and digital transition.”
Safest path
Politically too, von der Leyen’s decision represented the safest path, especially in regard to the delicate balance of top jobs among the main conservative, socialist and liberal parties. Her assignment to Dombrovskis keeps EU trade policy under the control of the center-right European People’s Party, von der Leyen’s own political family, of which McGuinness is also a member.
At the same time, the selection of McGuinness has a dual benefit. It advances von der Leyen’s efforts to achieve a gender-balanced Commission, bringing the number of women around the College table to 13 out of 27. It also sends a signal to the often fractious and rebellious Parliament that von der Leyen recognizes and values the experience of its members. While McGuinness is currently serving as first vice president in Parliament, Dombrovskis too served in the Parliament, from 2004 to 2009 before becoming prime minister in Latvia.
The change in Dombrovskis’ role will be subject to scrutiny by Parliament, and the appointment of McGuinness requires a confirmation vote. But by forgoing a broader reorganization, von der Leyen now ensures debate and discussion in Parliament over Commission personnel will be kept to a minimum, and that attention will stay focused on the president herself, who is due to give her first State of the Union speech in the Parliament plenary in just eight days.
MEPs showed in the round of confirmation hearings of von der Leyen’s original commissioner picks back in October last year that they would not hesitate to chuck out nominees they did not like. As officials who are well-vetted and have extensive personal relationships, Dombrovskis and McGuinness can expect a smoother ride from MEPs.
There was another, unspoken, political message in von der Leyen’s decision that reflected her distaste for disruption. By taking the highly prominent trade portfolio away from Ireland, she issued a clear warning to other national governments about the perils of letting EU commissioners become ensnared in domestic political controversies.
Hogan’s appearance at a golf club dinner that violated coronavirus guidelines on large gatherings, and his alleged breach of other travel rules, might have been survivable had top Irish officials, including Prime Minister Micheál Martin and Deputy Prime Minister Leo Varadkar, not publicly condemned Hogan’s actions and called on him to reconsider his position in Brussels.
If von der Leyen’s decision was geared largely at maintaining a steady ship, Dombrovskis was quick to acknowledge that the EU faces rough seas ahead with regard to global trade policy, particularly regarding relations with China and the U.S. — the biggest global trade powers — and efforts to shore up the World Trade Organization.
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‘Turbulent water’
“We’re currently in turbulent water as regards global trade, relations with the U.S., relations with China, reform of the World Trade Organization,” Dombrovskis said, speaking live on stage at the Brussels Economic Forum, just minutes after von der Leyen’s announcement.
Dombrovskis said that with the U.S., the goal was to avoid any escalation of conflicts that have arisen with Washington during President Donald Trump’s term, while with China the EU still aims to reach an investment agreement and wants to reverse some imbalances.
“As regards our negotiation with the U.S., as you know we’re currently discussing some mini-deals, if you want, some targeted deals,” he said. “In a sense, the good news is we’re avoiding a further escalation of trade conflicts we saw some year and more ago.”
“And in the case of China,” he added, “Indeed we are working now and focusing on an investment agreement. Of course, it would be great if we were able to conclude it this year. But there I would say substance before deadlines. It needs to be an ambitious agreement and indeed to address challenges and imbalances we are facing in our investment relations with China.”
While Dombrovskis is well-briefed on EU trade policy in his role as executive vice president with a broad economic portfolio, McGuinness will face somewhat unfamiliar terrain in taking over as commissioner for financial services, financial stability and the capital markets union.
On policy, McGuinness is an expert in agriculture. She has served in the European Parliament, and as a member of the Agriculture Committee, since 2004. Prior to that, she worked as a journalist and was editor of Ireland’s Farming Independent. She has a degree in agricultural economics and was the EPP’s lead negotiator in Parliament on reform of the EU’s Common Agricultural Policy.
In a brief statement after her nomination, McGuinness proclaimed herself “honored” and declared the EU “a positive force for change.” She said she would withhold further comments and begin preparing for her confirmation hearing.
Losing the trade portfolio is a blow to Ireland, but not because of ongoing negotiations with the U.K. over its future trading relationship with the EU. With close economic ties, Ireland is set to be heavily impacted by the outcome of those talks, but in practice, Hogan had not been heavily involved, with Michel Barnier leading on the issue.
Nonetheless, the financial services role is a crucial one, and will have particular importance amid the EU’s continuing effort to forge a new political and economic relationship with the U.K. after Brexit.
McGuinness’ role, for instance, will include helping determine the “equivalence” of U.K. financial rules — an issue of vital importance to London’s financial services industry, which is worried about losing access and influence in EU markets once the Brexit transition ends.
While Parliament is widely expected to approve the changes, some MEPs were quick to warn that nothing should be taken for granted.
Kathleen Van Brempt, a Belgian MEP who is trade coordinator for the socialists group, questioned von der Leyen’s decision to add trade to Dombrovskis’ already hefty portfolio.
“He’s already vice-president of the Commission and responsible for the Eurogroup, which is a full-time job,” Van Brempt said. “It surprised me that one of the most important portfolios is added to that — how will he combine all those things?”
She acknowledged that Dombrovsksis is an experienced commissioner but not necessarily on trade. “Of course he has the Commission experience, which will help him in the beginning,” Van Brempt said. “But when it comes to trade, he still has to prove himself.”
Maïa de la Baume, Bjarke Smith-Meyer, Barbara Moens and John Rega contributed reporting.