The Economist - UK (2019-06-01)

10 Leaders The EconomistJune 1st 2019

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eenfromafar,Europeisshrinkingandineffective.InGer-

manyAngelaMerkel’schancellorshipiswindingdown.Do-

mesticwoesbedeviltheFrenchpresident,EmmanuelMacron.

Britainisleavingtheeu, whichisdividedbetweeneastandwest,

northandsouth,liberalsandauthoritarians.Thebigcentre-

rightandcentre-leftblocksarestruggling,aspoliticsfragments

acrossthecontinent.IfAmericaorChinawantstospeaktoEu-

rope,it islessclearthaneverwhomtheyshouldcall.

TheEuropeanParliamentelectionshavebroughtyetmore

fragmentation,withthetwomaingroupslosingseatsandtheir

jointmajorityintheeu’s legislature(seeEuropesection).Liber-

als,Greensandright-wingpopulistsgained.Theuniontodayre-

semblesa patchworkofideologicalandregionaltendencies(see

Graphicdetail).Thatmakesthetaskofparcel-

lingoutitsbigjobsextra-fiddly.Therearefour

vacancies: the presidencies of the European

Commission(theeu’s executive),theEuropean

Council(itssenate-likebodyofnationallead-

ers)andtheEuropeanCentralBank(ecb) aswell

asthe“highrepresentative”fortheeu’s foreign

andsecuritypolicy.Aconventionof 2014 says

thecommissionjobshouldgotothe“leadcan-

didate”ofthelargestgroupintheparliament.Underanolder

precedent,thoseappointedtothetoppositionsaremeanttoin-

cluderepresentativesofallcornersofthecontinentandofthe

bigpoliticalfamilies.Differentpermutationsarelinedupuntil,

likea Rubik’scube,everythingslotsintoplace.

Amorecomplexpoliticallandscapeputsbothofthesecon-

ventionsindoubt.Thetoplotintheparliamentisnow,asbefore,

theEuropeanPeople’sParty(epp), a groupconsistingmainlyof

ChristianDemocratparties.Buttheeppwononly24%ofthe

seats,whichhardlyjustifiesanexclusiveclaimtoleadthecom-

mission.AndtheRubik’sroutinecannothopetocapturethe

varietyofpoliticalfamiliesandregionalpatternsintoday’sEu-

rope.Evenifa tokensouthernerwereappointed,forexample,

thedifferencebetweena candidatefrompro-EuropeanSpain

andonefromEuroscepticItalymightbevast.If ChristianDemo-

crats,SocialDemocratsandLiberalsallgettorunthings,theonly

slightlysmallerGreenswillunderstandablyobject.Thecubehas

toomanydimensions.

Perhapsthatisjustaswell.Fornow,morethanever,Europe’s

leadersshouldbeconcentratinginsteadongettingtherightpeo-

ple for thejob.President DonaldTrumphas questionedthe

transatlanticalliance,tariffwarsthreatenEurope’sprosperity,

turmoilonitsborderschallengesitssecurity,digitalgiantsfrom

ChinaandAmericaaredwarfingitsfirms,andeconomicstorm-

cloudsareonceagaingatheringabovetheeurozone.Leadinga

morefragmentedEuropethroughthesedifficulties—letalone

reassertingits interestsandrelevancein the

world—willrequireseasonedleadership.

Theeumaynotgetit.ManfredWeber,the

epp’s candidateforthecommission,hasnoex-

ecutiveexperienceand,judgingbyhisassocia-

tionwithHungary’sauthoritariangovernment,

poorjudgment.Ifhefallsshort,leadersmayof-

fertheecbpresidencytoanotherGerman,Jens

Weidmann,a bankerwithüber-hawkishviews,

toensurethata Germangetsatleastoneofthetopjobs.Butthat

shouldnotbea given.Ina moremeritocraticeuthecommission

presidencymightgotoMargretheVestager,thedynamic(Dan-

ish)competitioncommissioner.AntonioCostaofPortugal,Leo

VaradkarofIrelandorevenMrsMerkel,allskilledcompromise-

brokers,mightleadthecouncil.Attheecb, a moderatelikeFin-

land’sOlliRehnwouldbebetterthanMrWeidmann.

Truemeritocracyisimprobable,alas.Nationalegosandpow-

erpoliticswillalwaysrequiresomehorse-trading.Butasmuch

aspossible,theeushouldfocusonsubstance.Fromtheeuro-

zoneandmigrationcrisestotheBrexitvote,theeuhashadsev-

eralbrusheswithmortalityinrecentyears.Morearedoubtlessto

come.Itsbigjobsmatter.Placeholdersshouldnotapply. 7

Buggins belongs at the back

When picking leaders, Europe should put skill before box-ticking

The EU’s top jobs

I

t has beena decade since America’s latest recession, and it

has taken that long for the Federal Reserve to ask itself whether

it is ready for the next one. On June 4th officials and scholars will

gather in Chicago to debate how monetary policy should work in

a world of low interest rates. The benchmark rate is 2.25-2.5%,

which gives the Fed little room to cut before hitting zero—and

less than half as much as it has needed in past downturns. As if to

remind policymakers that rock-bottom rates are here to stay, the

ten-year Treasury yield fell below 2.3% this week. Other central

banks, many of which preside over still lower rates and weaker

economies, are looking to the Fed for inspiration.

The belated battle-planning, although welcome, is awkward-

ly timed. Central banking is becoming more politicised. Presi-

dent Donald Trump has called for the Fed to cut rates and tried

unsuccessfully to appoint two of his cronies to its board. Left-

wingers are increasingly interested in taking charge of monetary

policy. In Britain they have suggested, variously, that the Bank of

England should cap house-price growth and target productivi-

ty—as if the rate of technological change were a monetary phe-

nomenon. Central banks are often eyed as a source of cash for in-

frastructure investment or for fighting climate change. The

European Central Bank’s quantitative easing (qe), bond-buying

Think bigger

To equip themselves for the next recession, central banks face a delicate task

Central banks