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NEWSMAKER-Juncker rises from EU fixer to fixture
06/27/2014 Email this story  |  Printable Version

* Former Luxembourg leader is veteran in art of EU compromise

* Fiercely opposed by Britain as "wrong man" to reform bloc

* Centre-right politician defends strong rights for workers

* British exit threat may dominate his five-year term

By Paul Taylor

BRUSSELS, June 27 (Reuters) - Jean-Claude Juncker, who was nominated as the next European Commission president on Friday over fierce British opposition, has been a skilled fixer and bridge-builder at the heart of Europe's monetary union for 25 years.

The only leader still active to have been at the table at the 1991 Maastricht summit that laid the foundations of the euro, he faces a daunting challenge to restore public confidence in European integration and hold the EU together.

Juncker, 59, prime minister of Luxembourg for 19 years until he was defeated last year after an espionage scandal shook his government, was in the thick of the battle to save the euro zone from a debt crisis that threatened to engulf it in 2010-13.

He chaired euro zone finance ministers' meetings that agreed on financial bailouts for five member states, tightened budget discipline rules and shaped austerity policies that sparked a political backlash against the EU in several countries.

At the height of the euro crisis, Juncker, an intensely private man who deploys a wry, self-deprecating wit in four languages, said he preferred "dark, secret debates" since the glare of publicity only fed financial market panic.

The centre-right politician built his reputation as an indispensable backroom weaver of compromises between the very different German and French concepts of economic and fiscal policy. Those have kept the European Union show on the road.

He helped craft the Stability and Growth Pact budget discipline rules in 1997 and rewrote them, building in more flexibility, after France and Germany breached them in 2003.

All the while, he nurtured tiny Luxembourg's prosperity as a low-tax financial centre wedged between Germany, France and Belgium - a business model long sheltered behind a wall of banking secrecy that was only dismantled in his final year.

The trained lawyer who became finance minister aged 34 now faces a far bigger challenge to revitalise the bloc's most influential institution, with more than 20,000 staff, and drive political and economic reforms on which the 28 member states have very different demands.

People who have worked closely with Juncker question how this sometimes irritable man will cope with the management challenge of running a large bureaucracy and a big personal staff, and whether he has the stamina for the constant travel and speech-making imposed by the role currently held by Jose Manuel Barroso, a former prime minister of Portugal.

His task will not be eased by British Prime Minister David Cameron's branding him the wrong man at the wrong time, and objecting that his nomination was the result of an illegitimate power grab by the European Parliament.

Assuming EU lawmakers confirm him in a July 16 vote in which he seems assured of a majority of centre-left and centre-right deputies, his five-year term may be dominated by Cameron's efforts to renegotiate Britain's relationship with the EU before a referendum he has promised Britons in 2017 that will give them the chance to quit the bloc altogether.

SOCIAL CHRISTIAN

Son of a steelworker who was drafted forcibly into the Nazi German army after the invasion of Luxembourg in 1940, Juncker's political and social views were shaped by his postwar childhood in a Christian trade union family.

"If my father had had to fear for his job every six months, I would never have seen the inside of the Strasbourg law faculty," he told a small group early this year, saying that had convinced him of the need to curb flexible work contracts.

That background puts him on the left of the centre-right European People's Party. He supports a national minimum wage for all EU states, linked to median earnings, and a common set of employee rights in the bloc's single market.

He has long opposed giving free-marketeering Britain an opt-out from European employment legislation - such as limits on working hours - a position that may be tested by Cameron.

The British leader fought Juncker's appointment, depicting him as an old guard federalist who was the wrong man to lead the Commission at a time when voters in last month's European Parliament elections had demanded radical reform of the EU.

Eurosceptic British media caricatured him as a bureaucratic old soak but failed to produce damning evidence that might have undermined other leaders' confidence in his suitability.

In the EU, Juncker was long seen as the spiritual stepson of former German Chancellor Helmut Kohl. He remains popular in Germany, although Chancellor Angela Merkel, who in the end backed his appointment, has at times been less enamoured of his propensity for telling Germans home truths through the media.

After a quarter century as a fixture at EU summits, Juncker clearly stands for continuity and gradual closer union rather than radical change and decentralisation.

His views on European integration are tinged with nostalgia for the days when the European Council of EU leaders, dominated by the big member states, wielded less power and the "community method" of governance prevailed.

Under that system, the Commission has the sole right to initiate legislation based on the common European interest, with member states and the European Parliament jointly enacting laws and the European Court of Justice upholding them.

"This institutional triangle has been harmed in the last decade and has lost its vigour," he said early this year. "The European Commission has lost influence, which is a bad thing for the common interest."

The euro zone crisis was largely managed through emergency intergovernmental deals creating institutions such as the euro zone rescue fund outside the EU treaty with little role for the Commission and no European Parliament scrutiny.

Juncker would like to bring those arrangements under the EU treaty umbrella eventually but recognises any reopening of the charter now would be perilous given the state of public opinion. (Additional reporting by Luke Baker; Writing by Paul Taylor; Editing by Alastair Macdonald)


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