The UK is not the only place undergoing a change of leadership. Europe is in the process of appointing new heads for the European Commission and European Central Bank.
- Christine Lagarde is regarded as a ‘safe pair of hands’ and likely to continue loose monetary policy
- Lagarde’s political nouse may be useful in promoting a co-ordinated fiscal across Europe should the Eurozone economy dip
- Ursula von der Leyen’s nomination as head of the European Commission is more controversial
Whether the UK is in or out, these appointments will set the tone for Europe over the next few years and influence its economic and political direction.
Christine Lagarde, current head of the IMF, has been nominated to replace Mario Draghi as head of the European Central Bank. She is regarded as a ‘safe pair of hands’. Having previously urged Draghi to continue with loose monetary policy, she is likely to continue his dovish approach. This is good news for the flailing Eurozone economy, which continues to spit out weak data.
More importantly perhaps, she is considered a consummate politician, adept at bringing together the disparate parts of the Eurozone. While Draghi continues to reassure Eurozone governments that monetary policy tools are not exhausted in dealing with slow economic growth, there must come a time when governments need to look at fiscal policy. Lagarde’s political nouse may be useful in promoting a co-ordinated response across Europe.
Ursula von der Leyen, the nomination for the head of the European Commission is a former defence minister in Germany. She has not always commanded significant respect with Germany and among her peers. In an unflattering article, the Financial Times quoted Martin Schulz, former European Parliament president, saying: She is “the weakest minister in the government; apparently such a performance suffices to become head of the commission.”
It remains to be seen what this will mean for the UK’s negotiations with the European Union. It seems unlikely to make very much difference. The EU’s agenda will be the same, whoever is leading it and no matter how much ‘positivity’ Boris Johnson can muster.
However, her appointment is symbolically important. It shows that the EU is resisting the forces of populism and hiring a traditional pro-European. She has promised the European Parliament a bigger say in Brussels’ decision-making, which is an important reform. However, the liberal forces in the European Parliament would still have preferred a Spitzenkandidat or “lead candidate” who ran in the European elections in May.
Ultimately, it is all change and no change in Brussels. The UK won’t suddenly find itself dealing with a candidate sympathetic to its cause. That always seemed unlikely.