Monday

22nd Jan 2018

French EU commissioner to share powers on national budgets

  • Former French finance minister Pierre Moscovici will share his budget oversight powers with a Latvian hawk (Photo: ec.europa.eu)

EU economics commissioner Pierre Moscovici will have to share his powers on national budgets with fiscal hawk and commission vice-president Valdis Dombrovskis.

According to a letter sent by Jean-Claude Juncker to MEPs dealing with economic matters, Moscovici and Dombrovskis will "jointly" use their oversight powers on budget deficits of member states.

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"Any decision requiring approval by the commission shall be prepared and submitted by Mr Dombrovskis, as vice-president for the euro and social dialogue, jointly with Mr Moscovici, as commissioner for economic and financial affairs, taxation and customs," Juncker wrote in a letter dated 25 September.

Juncker was replying to a letter from the head of the European Parliament's economics committee, Roberto Gualtieri, who was asking about the division of tasks between the economics commissioners and vice-presidents.

The move is likely to appease fiscal hawks about the strict application of deficit rules given that France, Moscovici's home country, is the first in line for not meeting its deficit targets.

Dombrovskis is a former finance minister and prime minister of Latvia who pushed through harsh austerity measures to get his country back on track in the wake of the global financial crisis of 2008.

According to Juncker's letter, Dombrovskis will also be the one deciding who will go to the European Parliament, to eurozone finance ministers' meetings, to international meetings such as the G7 or G20 as well as the board meetings of the European Central Bank, so far attended by Moscovici's predecessor, Olli Rehn.

An EU source told this website that Moscovici is likely to continue representing the EU commission in the eurogroup meetings of eurozone finance ministers.

Juncker wrote in the letter that he expects vice-presidents to agree on "pragmatic arrangements" with their commissioners in the first weeks upon taking office.

Carsten Brzeski, chief economist at ING-DiBa, told this website that the Moscovici power-share is a sop to fiscal hawks.

"If true, this would be a clear tribute to the fiscal hawks, above all Germany. It would also make Moscovici’s task easier. Let’s not forget that France and French public finances will be the big test case for the eurozone in the coming months," Brzeski said.

He explained that if France gets strict treatment, Moscovici will suffer a media backlash in France, while if the commission looks too lenient, other countries will blame it on the French commissioner.

"In general, this entire set-up of “supervising” and “normal” commissioners will be a big challenge for the entire commission," Brzeski said, noting that the commission services might boost their ranks given the "doubling of tasks". If not, supervision will stay shallow, because there won't be enough experts to cope with all the tasks.

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