Who Is Undermining the Commission?

The economic crisis has already caused many victims: first it was banks and financial companies, then firms of any size, now it's increasingly employees being affected, in a dangerous downward spiral that is hard to stop. There is also a more illustrious victim, whose fate is not yet sealed, but which has been already dealt lethal blows, and this is the European Commission.

A supranational institution such as the Commission cannot weather unscathed a storm which is wreaking havoc in international economic relations: when world trade goes from an annualized growth of 20% in the first semester of 2008 to a sudden one- or two-digit percentage contraction in the second half, or when net inflows of private capital toward emerging economies shrink from $929 billion in 2007 to $164 billion in 2008, the crisis disrupts economic relations among countries.

In such circumstances, populations look to their national governments for help. Hence the multiplication of government interventions amid a flurry of rhetoric which is often protectionist, if not prey to populist nationalism.

An example of the new policy stance are the heavy subsidies that national governments are giving to their automobile industries: these measures have triggered a dangerous race to provide the best shelter for one's auto industry, even in the case of Spanish government, which will spend €4 billion, in spite of the fact that the Spanish nationals do not own significant stakes in the car-manufacturing sector. All this amounts to a devastating blow for the European Commission, since economic integration (i.e. a single market not distorted by government subsidies) and the coordination of industrial policies of member countries (which are now acting independently) are its two paramount objectives.

A new Commission will be selected by the Council and ratified by Parliament in a few months. The commissioners which are likely not to be reconfirmed are losing power to affect events. This would occur in normal times; in times of crisis, such effect is magnified. If only major member states had the courage to propose candidates with proved political weight and skills, this negative trend could be reversed, and the Commission would re-acquire prestige and élan.

In fact, the true damage being done is due to the lack of reaction by Brussels to the predictable and understandable intergovernmental reaction to the crisis. The rapidly shrinking ranks of Euro-federalists were unable to resist the interventionism of a hyperactive Sarkozy at the rotating presidency of the EU last fall. Sarkozy triggered the rush to industry subsidies and bailouts, saying that government aid would be tied to car manufacturing plants being relocated in France away from other EU countries. When other European countries followed suit, he triumphantly proclaimed that he was the one who had opened the new road. Cheers!