Thursday

22nd Oct 2020

Tainted official brought back to raise money for EU bail-outs

Jacques Santer - a ghost from the most ignominious time in the European Commission's history - was on Monday (23 January) evening appointed to head fund-raising for the EU's new bail-out fund.

A former Luxembourg prime minister, Jacques Santer gained notoriety for presiding over a weak commission, which resigned en masse in 1999 amid allegations of corruption.

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An independent panel at the time noted that "it is difficult to find anyone who has even the slightest sense of responsibility" in his institution.

Fellow Luxembourger Jean-Claude Juncker, who chaired the meeting of finance ministers which announced the decision, said that Santer had "served both Europe and his country the best way possible."

Santer's job will be to head up a Special Purpose Investment Vehicle (Spiv), designed to boost the firepower of the EU €440 billion temporary bail-out fund, the EFSF, in case big economies like Italy or Spain go down the path of Greece.

The Spiv is to sell debt to private firms and sovereign wealth funds and the proceeds are to be funnelled to struggling EU countries.

The whole set-up already has an image problem - EU efforts to get countries like Brazil and China on board have attracted little interest.

But Juncker on Monday dismissed the idea that Santer's background will make matters worse, asking journalists to "revisit the notes [they] may have" about Santer's work as commission president.

For his part, economic affairs commissioner Olli Rehn ventured a soccer-based joke.

"If you refer to the fall of the Santer commission in March 1999, I can take full responsibility for that. I was then head of cabinet for [Finnish] commissioner Liikkanen and I recall that in September 1998 the cabinets dared to beat the journalists in the final of the commission football tournament. Three to One. The journalists never forgave us and that led to the fall of the Santer commission in the winter of 1998/1999. I take full responsibility for this," he said.

The Santer appointment is already proving to be a gift to EU critics.

"Putting Jacques Santer in charge of fundraising is like putting Dracula in charge of the blood bank," British Conservative MEP Martin Callanan said in an emailed statement.

The Santer affair was prompted by a commission whistleblower who sent a report to MEPs.

A so-called Committee of Independent Experts later questioned the general culture in the commission. It doled out the harshest criticism on science commissioner Edith Cresson, a French woman who hired her dentist as an advisor. The dentist earned over €100,000 for two years' work during which he produced 24 pages of notes deemed to be of no value.

Santer's refusal to take responsibility and to resign along with Cresson escalated the crisis, ending in the mass resignation of all 20 commissioners - also including Italy's current leader Mario Monti - shortly afterward.

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