It has been a difficult few weeks for the European Commission. Still reeling from Britain's shock decision in June to leave the European Union, the EU found itself at the centre of a new political storm when the Belgian region of Wallonia threatened to derail an EU-Canada trade deal. While the comprehensive economic and trade agreement was eventually signed by the two sides at a delayed summit on Sunday, the reputational damage was already done, raising questions about the EU's credibility as a trading partner.
After that, the last thing the EU needed was a high-profile personnel scandal. But that is what came to pass on Friday when commission vice-president Kristalina Georgieva announced her resignation in order to take up the chief executive role at the World Bank, her former employer.
The surprise announcement was acknowledged in a statement by commission president Jean-Claude Juncker, who said it was with “great regret” that he had accepted Georgieva’s decision to resign. “The fact that she has been asked to take a leading role in the World Bank is an acknowledgment and recognition of Kristalina Georgieva’s many talents and her professionalism.”
Swirl of rumours
The resignation of one of the most respected commissioners in Brussels sparked a swirl of rumours. While sources say she was by no means an ally of Juncker’s, both sides denied any falling out, though Georgieva was forced to publicly deny a suggestion that Juncker’s chief of staff, Martin Selmayr, was the reason for her departure.
While officials expressed surprise at her departure, the fact that she had already indicated her intention to leave last month when she became a last-minute contender for the United Nations secretary-general job suggests she was never wedded to her commissioner role.
But it is the appointment of her successor that has caused most controversy in Brussels.
Germany's EU commissioner Günther Oettinger has been proposed by the commission as Georgieva's successor as EU budget commissioner. A member of German chancellor Angela Merkel's CDU party, Oettinger is currently EU digital economy commissioner, having held the energy portfolio in the second Barroso commission. Though an ally of Merkel's, he is known to be gaffe-prone. As one EU official put it : "He is less seen as Merkel's man in Brussels but rather as someone who the CDU is keeping as far away from domestic politics as possible."
His provisional appointment as EU budget commissioner – which must be approved by the European Parliament – has become embroiled in a fresh scandal, after Oettinger was recorded referring to Chinese officials as "slitty-eyed rascals" in an address to business leaders in Hamburg.
An apology has not been forthcoming so far from Oettinger, who in a German Sunday newspaper interview described his comments as "sloppy", adding that he did not mean to be disrespectful to China.
So far Merkel is standing by her man, while the commission has declined to condemn his remarks. A commission spokesman said on Monday that it had “nothing to add” on the matter.
European values
But serious questions have been asked, particularly by some members of the European Parliament, about the commission's role and responsibility in promoting acceptable standards, particularly when it has taken countries such as Hungary and Poland to task over their adherence to "European values".
Gabi Zimmer, president of the European United Left-Nordic Green Left group in the parliament, said Oettinger was not fit for office. Dutch MEP Sophie in 't Veld said "racist, sexist or homophobic 'locker-room talk' is not acceptable behaviour of a European commissioner".
With European Parliament approval needed to endorse Oettinger’s promotion, he is likely to face a tough grilling by MEPs when he appears before the budget committee.
As well as the furore over his suitability for the post, Oettinger’s appointment comes at a crucial time for the EU budget. While the usual horse-trading over the 2017 annual budget will intensify this month, the midterm review of the EU’s seven-year multi-annual financial framework, which runs until 2020, is also under way.
With Brexit looming, the implications of the departure of one of the EU's largest net contributors to the EU budget are beginning to sink in. Difficult conversations are on the horizon as member states, including Ireland, face the prospect of significantly larger budget contributions if the level of the EU budget is to be maintained.
As budget commissioner, Oettinger will be the man responsible for navigating these discussions. While the German commissioner is known for his ability to grasp complex policy and budgetary issues, diplomacy and political negotiating skills will also be necessary as he prepares to oversee one of the biggest changes to the EU’s budgetary arrangements in its history.