The power struggle descended into a shouting match last week at an informal, closed-door hearing of candidates for the second most-powerful position in the new European Fund for Strategic Investments. The hearing itself was already controversial, as the European Parliament has no role in the appointment process other than ratifying the choice made by the Commission.
Italian MEP Roberto Gualtieri, chairman of the Economic and Monetary Affairs Committee, clashed with prominent panel member Sylvie Goulard, a French MEP. Goulard objected to the way the meetings were run and was concerned that the committee was trying to shoe-horn an Italian bureaucrat into the role of the fund’s deputy managing director.
The informal vetting process for the new fund’s top jobs has left the economic panel deeply divided, frayed its relationship with senior members of the Budgets Committee and antagonized the Commission, which had not agreed to the Parliament’s expanded role. And the relationship between two prominent MEPs has “totally collapsed” as a result of the hearings, according to one official familiar with the process.
The investment fund was a key campaign promise of Jean-Claude Juncker in the 2014 election for the Commission presidency, and his executive’s political credibility is linked to the program’s success. The dispute shows how the nascent fund is still vulnerable to national interests competing for a slice of a huge spending pie. It also highlights Parliament’s ongoing efforts to exert more influence.
The European Fund for Strategic Investments, known as the “Juncker Plan,” will raise €315 billion over three years to support investment and help kick-start stalled EU economies. The EU budget will contribute €16 billion to the fund, with €5 billion coming from the European Investment Bank.
‘Underhanded Italian maneuver’
Italians have weighed into the job-selection melee, arguing that opponents of the candidacy of European Investment Bank official Alessandro Carano for the new post were relying on stereotypes suggesting an Italian could not be trusted with managing a large investment fund.
“They have been trying to portray this as some kind of underhanded Italian maneuver, as though being an Italian should rule him out,” said an MEP who was present at the informal hearing.
Carano, who was interviewed by both the European Investment Bank and the Commission, told POLITICO he was simply a civil servant who had applied for a job. “I have no links with either national governments or political parties,” he said.
Key appointments to the fund’s management structure are being hotly contested among EU countries, and observers in Parliament say the center-left Italian government, which is hoping to use the fund to support key infrastructure development, is determined to see an Italian national in a top role.
To manage the hiring process, the Commission announced in January that it would ask the European Investment Bank (EIB) to develop a shortlist of candidates to help a “steering board” select the right person for both the roles of managing director and deputy managing director. The board is made up of three officials from the Commission and one from the bank.
The only role Parliament was given in the process was the right to hold an up-or-down vote on the selected candidate, which will take place at a confirmation hearing on October 6. The Commission said it is following the appointment procedures and it will inform Parliament of its choice of candidate ahead of the hearing.
But the economics committee launched its own informal vetting process of the EIB shortlist — a process called “pre-hearings” which the panel can use to reach agreement ahead of a formal confirmation. Such meetings offer a way to put political pressure on the Commission to take Parliament’s candidate preferences into account. The meeting took place in Gualtieri’s office on September 22.
Gualtieri contacted the Budgets Committee chairman, Jean Arthuis, a French member of the Alliance of Liberals and Democrats for Europe group, to inform him of the informal hearings. The Budgets Committee had also been involved in the process of setting up the Juncker Plan.
But according to members of that panel, Arthuis declined to take part and instructed his committee members to steer clear of the process, fearing it lacked a legal basis.
While the shortlist has not been finalized, MEPs have confirmed that Wilhelm Molterer, a former Austrian center-right finance minister who is now on the EIB’s management committee, was top of the list and his candidacy for the role of managing-director was not contested.
Also on the list were Carano, an EIB official who had been seconded to the Commission to help set up the Juncker Plan, and two female candidates — a Spaniard and a Bulgarian.
Gualtieri declined to respond to claims he had clashed with Goulard, but defended the process. “The European Parliament has clear prerogatives in this area,” he said, “and we are determined to ensure that merit and the quality of the candidate prevail over any attempt of politicization.”
Goulard also declined to discuss the argument, but said it was “not a matter of people, but a matter of principle.” She said that fund’s money should “go to good projects which are not based on what passport those backing the project hold.” Goulard also said she was keen to see Parliament support gender balance in such appointments.
One MEP who attended the informal hearing said the Bulgarian candidate, who took part via video-conference, made a strong presentation and was widely seen as the Commission’s preferred candidate for the deputy managing director role. MEPs believed Commission Vice President Kristalina Georgieva was backing the woman, described as a former Bulgarian junior minister. Georgieva’s office did not respond to a request for comment.
Other MEPs who attended the informal hearing said there was broad, cross-party consensus that Carano was the strongest of the candidates.
Fabio de Masi, a German MEP from the left-wing European United Left/Nordic Green Left grouping, said that unlike other applicants, Carano spoke frankly about problems which had been identified and how he would address them. “For me, it was purely a decision based on
De Masi said he has never supported the Juncker Plan and, while being of Italian descent, he opposed the Italian government of Matteo Renzi and had little in common with the Italian center-left in the European Parliament — which includes Gualtieri. However, he said Carano was both “knowledgeable and determined that it should not be business as usual” and he clearly won over the MEPs who heard him speak.
But MEP Marco Zanni, from Italy’s anti-establishment Five Star Movement, said the quality of the candidate was not the issue. “Even if the Italian turns out to be the best, what Gualtieri has done goes against conventions and certainly against the rules,” said Zanni, who is a member of both the the economic committee and the budgets committee.
“I received an invitation to attend [the informal hearing] but I declined it,” Zanni said. “I will have no problem in attending the official hearing. But this unofficial meeting held in Gualtieri’s office — this goes against the way Parliament should work.”
“The shortlist must be officially communicated to Parliament,” he said. “To the best of my knowledge, that has not happened yet.”
This article was updated to clarify the explanation of Parliament’s role in the confirmation process.