The head of the European Commission, José Manuel Barroso (pictured), is close to naming his new team, but talks have stalled on French commissioner Michel Barnier's bid to manage an enlarged portfolio that would include the financial services sector.
REUTERS - Finland's Olli Rehn is expected to take charge of economic and monetary affairs in the European Union, diplomats said on Thursday, giving him a big role in efforts to revive Europe's economy after the credit crunch.
Spaniard Joaquin Almunia will make way for him in that job and is expected to become the 27-country bloc's competition commissioner, also one of the most powerful jobs in the EU's executive, the European Commission.
The EU is forming a new Commission as part of efforts to increase its influence on the world stage following the naming of a president and a new foreign policy chief and ratification of a treaty intended to make EU decision-making smoother.
"These posts have been offered to Rehn and Almunia," one EU diplomat said. Several others also said Rehn and Almunia would soon be named by Commission President Jose Manuel Barroso.
Almunia, a 61-year-old Socialist, has won a reputation for independence and fiscal prudence as economic and monetary affairs commissioner. Rehn, 46, has overseen the accession of Romania and Bulgaria as EU enlargement commissioner.
"Both men are two of Commission President Barroso's top lieutenants and they are seen as safe pairs of hands," another EU diplomat said. "In making these appointments, Barroso keeps tight control on two top jobs and keeps Paris, Berlin and London's hands off them."
Europe's economy has started to recover after the global crisis. The EU faces a decision on when to stop emergency financial measures that were used to prop up the economy, and needs to tackle soaring budget deficits.
The competition commissioner enforces strict rules on state aid, prevents protectionism and upholds the EU's single market.
The appointment of such a trusted ally as Almunia underlines the importance Barroso attaches to cracking down on any signs of protectionism or flouting of EU competition rules.
Barroso has made clear he intends to respond to criticism that the EU has not upheld its own strict rules governing its single market since clearing a series of national rescue schemes for banks, carmakers and companies hurt by the credit crisis.
Trade, Internal Market
EU envoys said Barroso was expected to appoint former Belgian Foreign Minister Karel De Gucht as trade commissioner when he unveils his 27-member team in the next few days. De Gucht is now development and humanitarian aid chief.
Germany's Guenther Oettinger is expected to be awarded a beefed-up energy portfolio and former French Foreign Minister Michel Barnier is likely to be put in charge of the EU's large internal market dossier, they said.
Denmark's climate and energy minister, Connie Hedegaard, whose country will host global climate talks in Copenhagen, is expected to be the bloc's new climate chief.
Negotiations are continuing over whether Barnier's post will also oversee the important financial services sector or whether it would be merged with monetary affairs.
"Barroso is standing his ground. He does not want to be bullied by Paris or London over this. But France is desperate for the post," one EU envoy said.
Britain is opposed to France gaining control of the post because of fears that Paris may call for taxpayer money to shore up state-owned banks. Britain, home to the EU's largest financial centre, is also fearful of a Franco-German attempt to undermine Europe's financial capital.
The newly-created justice and human rights portfolio is expected to go to Luxembourg's Viviane Reding who is rewarded for her efforts to cut roaming costs as the EU telecom's chief.
Italy's Antonio Tajani is likely to move to the larger industry post and Poland's Janusz Lewandowski will be in charge of the bloc's lucrative budget portfolio.