The six-month-old Juncker Commission has promised a new way of running the EU — one more accountable to voters and more streamlined in its approach to regulation. Everything is supposed to be “smarter and better.”
But while conventional Brussels wisdom is preoccupied with the European Commission’s all-powerful first vice president, Frans Timmermans, as the point man in the war on over-regulation and over-reach, there’s another person working a more nuts-and-bolts approach to reform.
Vice President Kristalina Georgieva is hoping to reverse years of cynicism about how the EU spends money. She is shaping a new role focused on changing the way the EU functions internally rather than the legislation it adopts. She is effectively the EU’s chief operating officer.
In a career spanning low-paid academic work behind the Iron Curtain in her native Bulgaria, to managing 186 national interests as vice president of the World Bank, to running the EU’s humanitarian aid agency in the last Commission, Georgieva has built a reputation as a tough administrator.
“Every job I took I would revamp it, restructure it and leave,” Georgieva told POLITICO in an interview. “Fifteen years later it is still running pretty much the same.”
That one of the most reform-minded members of the current Commission comes from one of Europe’s most notoriously corrupt states is especially notable.
Georgieva is clearly proud of her native country — she organizes an annual folk-dancing event in Brussels — but even she recently joked that 96 percent of Bulgarians don’t trust their judiciary and that the other 4 percent must be judges. Her first appointment to the Commission, in 2010, came after an earlier Bulgarian candidate was accused of corruption.
Her fast-rising trajectory has many wondering whether Georgieva might seek to lead the United Nations when Ban Ki-moon leaves office at the end of 2016. The job of secretary-general has been expected to go to a candidate from Eastern Europe, but a UN diplomatic source says the eastern bloc countries have yet to mount an efficient campaign to secure the post.
“They aren’t ready for all the necessary vote swaps” to win approval in the UN assembly, the UN diplomat said. “They couldn’t answer basic questions about whether any bipartisan consensus had been reached internally, or across the eastern bloc.”
Another obstacle: Bulgaria already has a candidate for the post in UNESCO head Irina Bokova. So Georgieva would have to defeat an insider from her own country.
But the UN source said an important consideration was that a successful candidate would have to be “amenable to both Russia and the US.” Georgieva’s successful stint at the World Bank included four years in Moscow managing Russia’s funding portfolio.
Georgieva herself refused to comment on her future plans. But if she succeeds in shaking up the Brussels bureaucracy, she will be well-placed for another big international role.
“You have no idea how big my current job is,” Georgieva said. Unlike the Commission’s six other vice presidents, who have only small central teams supporting them, Georgieva has thousands of staff in 10 departments reporting to her.
Among the changes she’s trying to implement: end the attitude of entitlement to taxpayer money that has gripped the Commission and Parliament for decades; subject officials to tougher performance reviews; and reorganize Commission departments so their structure and goals match President Juncker’s political priorities.
Scrutiny of EU spending is higher than ever. National governments facing their own tough economic times continue to pressure Brussels (the UK’s David Cameron recently called cutting the budget his signature EU achievement, and his re-election victory has given his Brussels reform message new momentum).
Georgieva’s predecessor as budget commissioner, Janusz Lewandowski, called the job “extreme sports.”
Former Commissioner Neelie Kroes, who visited Georgieva last week, highlights the unwieldy nature of EU spending as another challenge. “Not even Stalin had seven-year plans,” she said.
Georgieva is betting that her focus on discipline — rather than making the traditional pleas for “more Europe” and the money that requires — will prove politically acceptable.
The approach won an early victory in December, when Georgieva successfully shepherded a €3.5 billion budget increase for 2014 through a process that required agreement from the European Parliament and 28 member states.
“She didn’t ask for a euro she didn’t need,” said one of the negotiators in the process. “She was playing an honest broker role.”
A spokesperson from one of the EU’s budget-hawk member states said: “She doesn’t wag her finger at countries like us. She listens and that goes down well.”
Adds one director-general who reports to Georgieva, “She is perceived as a very serious partner for both Parliament and Council. She’s respected because she has a past of authority based on discipline.”
She’ll need it. Georgieva, among other goals, wants to create an app that explains how every euro is spent by the EU. There is already concern that such openness will only invite more scrutiny.
One recipient of EU funding, who requested anonymity, said that EU processes are so complicated, and reviews of funding reports so weak that “in the end we completely lie” about how the organization uses the EU money it receives. A full-disclosure app, a source said, would simply make it easier to spot abuse throughout the system.
SUBJECT TO FEEDBACK
Along with changing the EU’s spending culture, Georgieva is intent on upending its management culture.
“Change is now permanent. We have to learn to adjust,” Georgieva said, adding that the Commission’s 33,000-strong staff will just have to live with the consequences.
“If you want to reform the EU you have to start with HR,” said a senior aide to President Juncker, who likened the Commission’s processes to the French civil service of 30 years ago.
Georgieva said that first among her changes is the rollout of “360 degree” performance reviews, in which Commission officials will be subject to feedback from junior staff as well as bosses.
ALL DEPARTMENTS NOW REVIEWED
Alongside this all departments are undergoing rapid macro-reviews that Georgieva wants to complete by the end of summer. The reviews are being performed by a mix of in-house and external consultants, and closely resemble an overhaul she managed during the last Commission, when she ran the humanitarian aid department.
“What I want to do is first look at the horizontal services,” she said. “Increase the ratio of staff to one HR officer, same in IT. I want to do it first with HR — I want [the other] people to know I am not after them.”
But official spokespeople confirmed she is also guided by Juncker’s all-consuming priority of aligning departmental agendas with the “10 political priorities” he presented to the European Parliament in 2014.
That means other departments are facing cuts as early as June. Georgieva has already won approval from colleagues to move or effectively demote seven directors at DG GROW— the directorate-general for internal market, industry, entrepreneurship and small businesses. Internal Commission documents seen by POLITICO indicate that DG GROW will end up losing around 200 staff.
A SELLABLE STORY
Georgieva’s spokesperson Alexander Winterstein said she started with GROW because of the “high potential for rationalization” — Commission code for a bloated department. It’s a recurring problem that partly explains why Georgieva has created the post of “Chief Economic Analyst of the Commission.”
While trade unions physically blockaded Georgieva’s predecessor in 2013 for not doing more to win them salary increases, none of the three unions contacted by POLITICO were willing to criticize the current plans.
The vice president herself claims “everyone is ready for change,” based on a listening tour she conducted during her first weeks in office.
Ultimately though, Georgieva will need the College of Commissioners united behind her. She is relying on their political instincts rather than their affection to carry the day.
“I tell them and they know it, I would only be credible and I would only carry water for you if you help me … help me to have a story that is a sellable story to the taxpayer,” she said. “If people don’t know what we do with their money, why would they support us?”
Ryan Heath, associate editor and senior EU correspondent at POLITICO, was a spokesman for former European Commissioner Neelie Kroes from 2011 to 2014.
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