Wednesday

18th Oct 2017

EU commission under fire over Barroso bank job

  • Barroso oversaw the managing of Europe's debt crisis, party triggered by Goldman Sachs (Photo: europarl.europa.eu)

The European Commission has tried to stave off criticism after its former president, Jose Manuel Barroso, went to work with US investment bank Goldman Sachs.

It said that Barroso, under EU rules, had no obligation to notify the commission about his decision.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Commissioners are required to tell the executive if they want to take up a sensitive job within 18 months after they leave office.

"After the 18 month period of cooling off, there is a reasonable assumption that the access to priviliged information or possible influence are no longer an issue, and they no longer obliged to notify," the commission’s spokesman, Margaritis Schinas, said on Monday (11 July).

The current commission president, Jean-Claude Juncker, learned about Barroso’s decision after bank made it public and did not want to comment on Barroso's choice, Schinas said.

Goldman Sachs said last Friday that it was hiring Barroso to be an advisor and non-executive chairman of its international businesses, as it struggles with the fallout from Britain's vote to leave the EU.

Goldman Sachs, and other investment banks, is facing uncertainty as it is based in London, but offers services across Europe - a model that could be disrupted if the UK were to end up with limited access to the bloc's single market.

The commission spokesman also rebuffed calls to amend the rules for former commissioners on taking up controversial posts.

The Goldman Sachs job is highly sensitive because the bank was under fire for its role in the Greek debt crisis. Its personnel helped Greek authorities to mask the real level of its debt.

Schinas declined to comment on the politics of Barroso's decision. But one EU official, who asked not to be named, said Barroso's move was "not smart".

Backlash

Others did not shy away from open attacks.

"Barroso's decision … is morally and politically deplorable”, said Gianni Pittella, leader of the Socialist and Democrats group in the European Parliament.

"After 10 years of mediocre governance of the EU, now the former EU Commission president will serve those who aim to undermine our rules and values," he added.

The Brussels-based lobby watchdog, Corporate Europe Observatory's (CEO), said the commission’s line - that Barroso acted within the rules - was "pathetic".

"Major loopholes exist in both the rules and the way in which they are implemented … there should be a mandatory cooling-off period of at least five years for former commission presidents regarding direct and indirect corporate lobbying activities," the NGO’s Nina Holland said.

She noted that nine of Barroso’s former commissioners had gone to work for big business after their terms ended in 2014.

Timing

Meanwhile, the timing of Barroso's move could hardly have been worse for the commission.

Eurosceptic movements around Europe have long accused EU officials of trampling on ordinary people’s welfare to serve the interests of elites in developments that came to a head in the Brexit vote.

France's far-right Marine Le Pen tweeted that the Barrose move was "not a surprise for people who know that the EU does not serve people but high finance".

French socialist MEPs called on Goldman Sachs to let him go.

In a statement on Monday they called the appointment "outrageous and shameful”. They said that he breached the EU treaty and should be stripped of his EU benefits and pension.

They cited article 245 of the EU treaty, which says that commissioners should respect the "obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits."

Legacy

Barroso led the commission through the tumultuous years of the euro crisis and related bailouts.

Under his tenure, the EU set up financial rescue funds to help troubled countries and their banks, but at the cost of severe austerity in Greece, Ireland and Portugal.

Goldman Sachs was one of the US investment banks at the heart of the 2008 financial crisis that triggered the events when lenders traded failing mortgages as parts of complex financial instruments.

Earlier this year, the Wall Street firm agreed to a civil settlement of up to $5 billion (€4.52bn) with federal prosecutors and regulators to resolve claims resulting from the marketing and selling of faulty mortgage securities to investors.

Goldman Sachs also helped Greece to hide part of its deficit in the early 2000s, by using so called currency swaps. But the currency trades end up doubling the Greek deficit and leading to the edge of ruin.

Barroso himself had been a student leader in an underground Maoist group during his university years.

The 60 year-old served as prime minister of Portugal between 2002 and 2004 before heading the EU's executive for 10 years.

Opinion

How to fix the EU 'revolving door'

Barroso's move to Goldman Sachs screams out the need for EU institutions to create a real ethics panel that inflicts financial and other sanctions on people who sell out the public they once served.

Opinion

Left flirting with antisemitism in EU parliament

It is outrageous that Leila Khaled, a member of a group listed by the EU as a terrorist organisation, was given a platform in the EU parliament, a body representing democracy and peaceful cooperation.

News in Brief

  1. Spanish Court declares Catalan referendum law void
  2. EU to keep 'Dieselgate' letter secret
  3. No deal yet on Mediterranean alliance for EU agencies
  4. EU Commission condemns Maltese journalist's murder
  5. Poland denies wrongdoing over forest logging
  6. Risk to asylum kids in EU increasing, says charity
  7. Schroeder warns of Turkey and Russia drifting towards China
  8. EU parliament wants equal pay for posted workers

Stakeholders' Highlights

  1. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  2. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  3. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  4. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  5. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  6. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  7. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  8. CECEE-Privacy Regulation – Hands off M2M Communication!
  9. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  10. EU2017EEEHealth: A Tool for More Equal Health
  11. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  12. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year

Latest News

  1. EU rejects UK claim it's slowing Brexit talks
  2. Nepal troops arrive in Libya to guard UN refugee agency
  3. Is Banking Authority HQ the Brexit 'booby prize'?
  4. EU-Russia trade bouncing back - despite sanctions
  5. No sign of Brexit speed-up after May-Juncker dinner
  6. EU defence strategy 'outsourced' to arms industry
  7. EU privacy rules tilt to industry, NGO says
  8. Malta in shock after car bomb kills crusading journalist

Stakeholders' Highlights

  1. ILGA-EuropeMass Detention of Azeri LGBTI People - the LGBTI Community Urgently Needs Your Support
  2. European Free AllianceCatalans Have Won the Right to Have an Independent State
  3. ECR GroupBrexit: Delaying the Start of Negotiations Is Not a Solution
  4. EU2017EEPM Ratas in Poland: "We Enjoy the Fruits of European Cooperation Thanks to Solidarity"
  5. Mission of China to the EUChina and UK Discuss Deepening of Global Comprehensive Strategic Partnership
  6. European Healthy Lifestyle AllianceEHLA Joins Commissioners Navracsics, Andriukaitis and Hogan at EU Week of Sport
  7. Nordic Council of MinistersNordic Council Representative Office Opens in Brussels to Foster Better Cooperation
  8. UNICEFSocial Protection in the Contexts of Fragility & Forced Displacement
  9. CESIJoin CESI@Noon on October 18 and Debate On: 'European Defence Union: What Next?'
  10. Nordic Council of MinistersNordic Innovation House Opens in New York to Support Start-Ups
  11. ILGA EuropeInternational Attention Must Focus on LGBTI People in Azerbaijan After Police Raids
  12. European Jewish CongressStrong Results of Far Right AfD Party a Great Concern for Germans and European Jews