Juncker takes helm in face of looming tax deal storm

The winds of change swept into Brussels this week as Jean-Claude Juncker and his team of 27 commenced their five-year term at the helm of the European Commission.

Lest anyone doubt the new commission president's euro credentials, Juncker's working week began in Frankfurt where he attended the launch of former German chancellor Helmut Kohl's new book on Europe. Today he will participate in a debate with former European Commission president Jacques Delors, the man he described as his "hero" in his address to the European Parliament in July.

Juncker's presence at both events is symbolic. The former Luxembourg prime minister was widely criticised during the nomination process for being a throwback to 1980s Europe, an arch-federalist with an eye to the past rather than the future challenges for the union.

But, despite his reputation as an old-school Europhile, Juncker has pledged to bring change to the commission, and modernise the sprawling institution he will govern for the next five years.

Most fundamentally, Juncker has initiated a radical restructuring of the 28-member commission by introducing seven vice-presidents, with responsibility for key policy areas. These commissioners will oversee the work of the remaining commissioners.

Euro-watchers got their first taste of how this system will work in practice on Tuesday, when economics commissioner Pierre Moscovici and commission vice-president Jyrki Katainen jointly presented the commission's autumn economic forecasts. In a further division of labour, Moscovici will represent the commission at today and tomorrow's Eurogroup and Ecofin meeting, with Latvia's Valdis Dombrovskis, the vice-president for the "euro and social dialogue", attending today's European Central Bank meeting in Frankfurt.

Responsibility abdicated?

Privately, European Commission officials have queried the efficacy of Juncker’s new structure. By delegating responsibility to a new layer of senior commissioners, some are suspicious Juncker wants to abdicate responsibility for key decisions. Dutch commissioner

Frans Timmermans

, who was appointed as “first vice-president” is expected to take a leading role in the running of the commission, while Juncker’s chief of staff,

Martin Selmyar

, has already emerged as a powerful figure.

Sources say Catherine Day, the Irish secretary general of the European Commission, will stay on for a transition period – possibly up to a year – at the helm of the EU's executive arm, with a reshuffle of senior staff in directorates-general possible around April.

Yesterday, Juncker defied sceptics by making a surprise appearance in the European Commission press room, after the first meeting of the College of Commissioners. Vowing to work constructively with the media, a self-assured Juncker gave a brief update on the morning’s meeting, which he said focused primarily on the economy.

Since his appointment in July, he has been at pains to stress that his commission will be more political than the last. One of the criticisms levelled at the José Manuel Barroso commission was that it played second fiddle to the larger EU member states during the financial crisis, with the European Council, rather than the commission, taking the key decisions.

As Juncker’s team has been keen to point out, the Juncker commission includes nine former prime ministers and deputy prime ministers.

Juncker insisted yesterday the European Commission was much more than just a bureaucratic institution. "I'm not head of a gang of bureaucrats. I'm the head of 28 political commissioners," he said, adding that he was not "frightened" of any prime minister, widely taken as a reference to British prime minister David Cameron.

In the spotlight

But for all his grand plans for a new kind of commission, Juncker may face his toughest challenge yet today. The publication of documents that reveal how Luxembourg offered specific tax deals to hundreds of companies while he was prime minister is likely to turn the spotlight on the commission president.

Asked yesterday about the commission's ongoing investigation into tax deals offered by Luxembourg to Fiat and Amazon, Juncker said he would not stand in the way of the commission doing its work, noting that its competition division had "every right" to initiate the enquiries.

However, the revelation in The Irish Times and other international newspapers that more than 300 companies profited from letters of comfort offered by the Luxembourg authorities will leave Juncker with serious questions to answer.

Regardless of the commission’s power to investigate these tax rulings, the optics of the new head of the European Commission justifying a system that facilitated aggressive tax planning is likely to re-open questions about Juncker’s suitability for the leading role.