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Gentiloni to be commissioner for Economic Affairs under Dombrovskis’ watch

Paolo Gentiloni [personal archive]

Well, but not so well. Italy asked for the commissioner for the European Commissioner for Economic and Financial Affairs, Taxation and Customs. To achieve this goal the new-formed government proposed former prime minister Paolo Gentiloni to replace Pierre Moscovici. The Italian offer was accepted, but the final outcome is not so good for the “Belpaese”.

Well, it is true that this portfolio is very prestigious and it is true that Italy has all the interests in managing the EU economic policies. At the same the internal organisation thought by Ursula von der Leyen for her European Commission doesn’t leave Gentiloni free to act as the Italians would like.

Gentiloni, from PES, will be controlled by Valdis Dombrovskis, an EPP man, who will serve as commissioner for Financial services and “will coordinate the work on an Economy that works for people”. It means to have the right and the duty of dealing with economic affairs, as well. More over, Dombrovskis is one of the three executive vice-presidents of the Commission together with Frans Timmermans and Margrethe Vestager. These ‘fab three’ are the team-leaders immediately after the president von der Leyen.

Dreaming a little dream of change

Italians were sure that having Gentiloni as commissioner for Economic and Financial Affairs would have meant less restrictions in fiscal policy. Or, at least, less austerity. The point is that Dombrovskis is a fierce supporter of the sound public finance. Already during these last five years Moscovici and Dombrovskis played the role of the good cop and bad cop, respectively. The same will happen under the von der Leyen Commission.

In Italy there the idea, and still is, that now every problem at EU level is over. That’s not true at all. There is a general sentiment by which thanks to this portfolio now it will be possible to change the Stability and growth pact.

“The stability and growth pact was developed under the crisis, and was approved by everybody”, von der Leyen recalled during the press conference hold to unveil the next EU Commission. “Rules are clear, limits are clear, flexibilities are clear”. Translation: you know what to do, then do it. And the pact is there to stay, so forget about change of any kind.

Von der Leyen’s mission letter to Gentiloni is very clear. “You will ensure the application of the Stability and Growth Pact, using the full flexibility allowed in the rules. This will help us achieve a more growth-friendly fiscal stance in the euro area and stimulate investment, while safeguarding fiscal responsibility”.

The only real change possible 

Italians believed a revision of the Stability and growth pact could be possible, thanks to Gentiloni. Von der Leyen has other ideas in mind. Gentiloni was asked to work for a huge reform of the taxation policy.

The German lady wants the Italian commissioner to “lead international efforts to find an agreed approach on digital taxation”, as well as to “lead on the proposal of a Carbon Border Tax, working closely with the Executive Vice-President for the European Green Deal” (so under Timmerman’s supervision) . Finally Gentiloni “should lead efforts on making a common consolidated corporate tax base a reality”.

All these activities will not make industries happy, and Gentiloni is the one who will have to pay the price of such a radical change.
Last but not least, “Europe must step up the fight against tax fraud, tax evasion and tax avoidance”, according to von der Leyen. So Gentiloni will be the one calling Italians to pay taxes on behalf of the EU, when Italians don’t like neither pay taxes nor the EU.

A Pyrrhic victory

So, the placing of Gentiloni on EU orbit was not a victory. Few in Italy are happy. Officially the prime minister Giuseppe Conte welcomed von der Leyen’s decision. “She grants Italy the most important portfolio”, he said in Rome. Nobody here denies the relevance and the importance of Gentiloni’s chair, but of course it must be seen in the light of the context we just described.

Having a quick recap, Gentiloni’s work will be supervised by Dombrovskis and Timmermans, and then everything will be assessed also by the president and the entire college.

Having a look at the scheme of the next European Commission, and baring in mind that there will be three ‘super vice-presidents’ plus other five vice-presidents, Gentiloni is just a “normal” commissioner. He has an important portfolio, but he is quitely on the bottom in the pyramid of power.

In the EP court

Now the ball is in the court of the European Parliament. According to the procedures, the nominees proposed by the President-elect of the Commission and by the Council for the various posts of Commissioner have to appear before the appropriate committees or bodies according to their prospective fields of responsibility. Public hearings will take place from 30 September to 8 October.

The European Parliament can approve or reject a proposed commissioner. In case of rejection, the member state must name another candidate, to be interviewed by the president of the European Commission and then newly grilled by the Parliament.

The Parliament always keeps a commissioner under scrutiny. A green light granted in a first moment doesn’t prevent the possibility of a no-confidence vote at another time. In fact there is still the possibility that a conflict of interests is identified during a Commissioner’s term of office. In that case the European Parliament asks the President of the Commission to implement recommendations. If the president fails to implement them, MEPs may ask the President of the Commission to withdraw confidence in the Commissioner in question, as foreseen by paragraph 5 of the Framework agreement on relations between the European Parliament and the European Commission.

Furthermore, where appropriate, MEPs can take action with a view to depriving the Commissioner in question of his or her right to a pension or other benefits in lieu of pension in accordance with the second paragraph of Article 245 of the Treaty on the Functioning of the European Union.

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