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ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: HOW TO TAKE ADVANTAGE OF THE NEW POLITICAL POWER RELATIONS?

APCO—November 2019

STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose power relations have never been so uncertain (see §-1, 2 and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1);

. INTENSIFY its attention to the MEPs and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired by Ursula Von Der Leyen on the 1st of December have led to tough negotiations on the European Union’s political agenda for the 2019–2024 legisla- tive round. These negotiations make it possible to measure a substantial evolution of parti- san (§-1), inter-institutional (§-2) and dip- lomatic (§-3) power relations at EU level, which economic actors must best under- stand in order to effectively promote their interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND TOWARDS UNCERTAINTY

Ursula Von Der Leyen’s inauguration speech1, the mission letters she sent to the Commissioners designated by the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which economic actors must adapt.

1.1. An institutional rebalancing towards the centre and the left

Although the EPP Conservatives remain the leading political force in the European Parliament and the European Council, the partisan composition of the three poles of the Community institutional triangle shows a clear shift towards the centre and left with regard to the 2019–2024 cycle: . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

OTHER

PPE

EXTREME RIGHT

GREENS

S&D RENEW EUROPE

. in autumn 2019, the European Council welcomes 10 members of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the national elections throughout the period 2019–2024; . more stable, the European Commission’s partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- dent), 9 socio–democrats, 4 Liberals, 1 Eurosceptic (Poland), 3 Independents (France, Hungary and Slovenia) and 1 Green (from Lithuania).

In this context, economic actors must fi rst target the elected representatives and members of the EPP, then the PES, then the liberal–democratic family, but also have an overall strategy towards the three components of the more or less informal “grand coalition” whose compromises will shape the EU’s decisions in the coming quarters.

1.2 Strong political infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 2024 legislature, even though the Green parties are in a weak position in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretation of the new partisan power relations, and therefore to integrate two other actors into their infl uence strategies: . on the one hand, the “Greens” who, supported by public opinion, will continue to have a powerful infl uence on EU policies on climate, environmental, economic, so- cial and perhaps external issues; . on the other hand, members of the Eurosceptic right and the extreme right, who represent more than 20% of the European Parliament, sit in several national gov- ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to their pressure in the face of migration, trade, security and neighbourhood challenges (enlargement).

1.3. More uncertain and therefore more open partisan negotiations

Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come of the new partisan power relations at European level now appears much more uncertain.

This new partisan situation is likely to weaken the EU’s ability to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary, whether they need a dynamic and entrepreneurial EU.

In this more fl uid and open context, it is also up to economic actors to adapt fi ner infl uence strategies, which can target key supporters in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL POWER RELATIONS

The diffi culties encountered during the hearing of the Commissioners–designate and the postponement of the start of the Von Der Leyen Commission refl ect tensions that are not new, but whose intensity will have an impact on the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most favourable to their interests.

2.1. A European Parliament that is more assertive

European parliamentarians were elected on the basis of a turnout of more than 50%, which strengthens their legitimacy and their desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it illustrates its desire to assert itself vis-à-vis the Commission and also the Council, which economic actors will have to take into account throughout the 2019–2024 cycle.

In order to push their advantage but also to highlight their difference, it is very likely that MEPs will be particularly aggressive on the issues they consider to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, in external matters, support for human rights and development aid.

2.2. A weaker Commission torn between the Council and the European Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sis of the “spitzenkandidaten” procedure promoted by the European Parliament.

It is also noteworthy that the two new executive vice-presidencies entrusted to Mar- garet Vestager and Franz Timmermans were imposed on Ursula Von Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European Commission will enable it to be as proactive and coherent as necessary (while its par- tisan composition is more diverse than the previous one) and whether it will be able to assert itself properly vis-à-vis the European Council and Parliament.

The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.

3 MORE CONFLICTUAL DIPLOMATIC POWER RELATIONS

In June, the Heads of State and Government adopted a 2019–2024 agenda4 of a few pages formalizing a global consensus on priority political orientations in a geopolitical context pushing Europeans to unite more (Russia, Trump, China, Brexit, Erdogan,...). This proclaimed desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less open struggle for infl uence, in which economic actors must take part.

3.1. Marked dividing lines in the Council

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles still to be resolved, and can be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” on economic, social and budgetary issues, and personalised by the opposition be- tween the “new Hanseatic League”5 and the “Med 7” summits6; . “East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized with the affi rmation of the Visegrad Group (Hungary, Poland, Slovakia, Czech Re- public).

Another dividing line is undoubtedly emerging between countries which, under the aegis of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a common horizon, it is not the same for all that concerns fi scal and social conver- gence, industrial policy, trade policy, etc.

In this context, the risks of tensions and blockages in the Council are all the greater as Member States take many essential decisions unanimously. These risks seem all the more acute as it will be tempting for many external powers more or less hostile to the EU (Russia, China, USA, Turkey, soon the UK, etc.) to put pressure on individual Member States to prevent the adoption of ambitious European initiatives. The further development of a variable geometry Europe, based on more intergovernmental mechanisms, could be the outcome of such confl icting pressures –to be anticipated by economic actors.

3.2. A heterogeneous infl uence within the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic actors to adjust their strategy of infl uence to the evolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage them to give priority to actions and contacts with: . German decision-makers, who are more infl uential than ever in the Commission (presidency) and the European Parliament (1st national delegation to the EPP and the Greens) and remain essential in the Council, despite the announced end of the Merkel era by 2021; . Spanish and French decision-makers: the Spanish because they are infl uential in the European Parliament (1st national delegation to the S&D group), the Commis- sion (High Representative) and the Council (likely re-election of Pedro Sanchez); the French because their President is one of the leaders of the European Council, their Commissioner holds a strategic economic portfolio and their elected representatives can play a pivotal role in the European Parliament (as the 1st national delegation to the Renew group). . nationals of four other countries must also be the subject of a specifi c strategy: the Dutch, given their government’s desire to assert post-Brexit liberal leadership and Franz Timmermans’ presence in the Commission’s Vice Presidency on the climate portfolio; to a lesser extent Italians, Romanians and Poles, given their important po- sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic actors must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle.

By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal (while the Romanian President is a member of the EPP) and the Italian government, whose leader is considered “independent”, is composed of many social democratic (and “5-star”) ministers. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. 6 Since 2016, the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus.

ABOUT AMCHAM AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmCham has many working groups that develop recommendations in the form of white papers and policy papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its members’ activities and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation.

ABOUT APCO WORLDWIDE APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, health care, fi nance, technology, energy and transportation.

AMCHAM — 77 RUE DE MIROMESNIL — 75008 PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

APCO WORLDWIDE — 12 BIS, RUE KEPLER — 75016 PARIS, FRANCE — WWW.APCOWORLDWIDE.COM — +33 1 44 94 86 66 for

for

ECONOMIC ACTORS IN THE FACE OF NEW EUROPEAN DECISION-MAKERS: ECONOMICHOW TO TAKE ACTORS ADVANTAGE IN THE FACEOF THE OF NEW NEW EUROPEAN DECISION-MAKERS: POLITICAL POWER RELATIONS? HOW TO TAKE ADVANTAGE OF THE NEW APCO—November 2019 POLITICAL POWER RELATIONS?

APCO—November 2019 STRATEGIC RECOMMENDATIONS FOR ECONOMIC ACTORS:

. INCREASE monitoring and infl uence actions towards all EU decision-makers, whose powerSTRATEGIC relations RECOMMENDATIONS have never been so uncertain FOR ECONOMIC (see §-1, 2 ACTORS:and 3); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1); . INCREASE monitoring and infl uence actions towards all EU decision-makers, . whoseINTENSIFY power its relationsattention have to the never MEPs been and so the uncertain Council, (seewho §-1, are 2 in and a strong 3); position in relation to the Von Der Leyen Commission (see §-2); . TARGET all political forces of government, from Greens to Eurosceptic right (see §-1); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and . thusINTENSIFY act in keyits attention national capitalsto the MEPs (see §-3).and the Council, who are in a strong position in relation to the Von Der Leyen Commission (see §-2); . STRENGTHEN monitoring and infl uencing strategies vis-à-vis Member States, and thus act in key national capitals (see §-3).

he entry into offi ce of the MEPs elected in May 2019 and the esta- T lishment of the European Commis- sion chaired he entry by intoUrsula offi Von ce Der of the Leyen MEPs on st the 1 elected of December in May 2019 have and led theto tough esta- Tnegotiations lishment on of the the European European Commis- Union’s politicalsion chaired agenda by Ursulafor the Von2019–2024 Der Leyen legisla- on tivethe round. 1st of December have led to tough negotiationsThese negotiations on the make European it possible Union’s to politicalmeasure agenda a substantial for the evolution 2019–2024 of legisla- parti- tivesan round.(§-1), inter-institutional (§-2) and dip- Tlomatichese negotiations (§-3) power relations make it at possible EU level to, measurewhich economic a substantial actors evolution must best of under- parti- sanstand (§-1), in orderinter-institutional to effectively promote(§-2) and theirdip- lomaticinterests, (§-3) on power the basis relations of the at main EU level ele-, whichments economicdescribed actorsbelow. must best under- Ursula von der Leyen stand in order to effectively promote their © European Union 2019 Source: EP interests, on the basis of the main ele- ments described below. Ursula von der Leyen © European Union 2019 Source: EP 1 PARTISAN POWER STRUGGLES PUSHING THE EU TOWARDS THE CENTRE AND 1TOWARDS UNCERTAINTY 1 Ursula PARTISANVon Der Leyen’s POWER inauguration STRUGGLES PUSHING speech ,THE the EU mission TOWARDS letters she sent to the CommissionersTHE CENTRE AND designated TOWARDS by UNCERTAINTY the Member States and her speech ahead of the vote backing her College2 seem to refl ect a Ursularefocusing Von Der of the Leyen’s Brussels inauguration College’s speechpolitical1, orientationsthe mission ,letters to which she sent to the Commissionerseconomic designated actors must by adapt. the Member States and her speech ahead of the vote backing her College2 seem to refl ect a refocusing of the Brussels College’s political orientations, to which 1.1. An institutional rebalancingeconomic towards actors the must centre adapt. and the left

Although the EPP Conservatives remain the leading political force in the European Parliament1.1. An institutional and the rebalancingEuropean Council towards, the the partisan centre composition and the left of the three poles of the Community institutional triangle shows a clear shift towards the centre and left withAlthough regard the to EPPthe 2019–2024Conservatives cycle: remain the leading political force in the European .Parliament the seats areand thus the European distributed Council in a more, the partisan balanced composition way within of the the new three European poles of theParliament: Community the institutional EPP has 24.3% triangle of the showsseats (26.6% a clear post–Brexit), shift towards the the S&D centre 20.5% and (21.2%), left withRenew regard 14% to (13%), the 2019–2024the Greens cycle: 9,9% (9,4%), the extreme right 9,7% (10,8%)… . the seats are thus distributed in a more balanced way within the new European Parliament: the EPP has 24.3% of the seats (26.6% post–Brexit), the S&D 20.5% (21.2%), OTHER Renew 14% (13%), the Greens 9,9% (9,4%), the extreme right 9,7% (10,8%)…

PPE OTHER EXTREME RIGHT

PPE GREENS EXTREME RIGHT S&D RENEW EUROPE GREENS

S&D . in autumn 2019, the European Council welcomesRENEW 10 members EUROPE of the EPP, 7 mem- bers of the PES, 7 members of the liberal–democratic family, 1 eurosceptic (Poland) and two independents (Italy and Lithuania)3—this composition will change with the . innational autumn elections 2019, the throughout European the Council period welcomes 2019–2024; 10 members of the EPP, 7 mem- . bers more of stable, the PES, the 7 Europeanmembers Commissionof the liberal–democratic’s partisan composition family, 1 eurosceptic will also be(Poland) more 3 andbalanced two independents than between (Italy 2014 and and Lithuania) 2019, with—this 9 Conservatives composition (including will change the with Presi- the dent),national 9 socio–democrats, elections throughout 4 Liberals, the period 1 Eurosceptic 2019–2024; (Poland), 3 Independents (France, . Hungary more stable, and theSlovenia) European and 1Commission Green (from’s Lithuania). partisan composition will also be more balanced than between 2014 and 2019, with 9 Conservatives (including the Presi- Indent), this 9 context,socio–democrats, economic 4 Liberals, actors 1 Eurosceptic (Poland), 3 Independents (France, mustHungary fi rst and target Slovenia) the and elected 1 Green (from Lithuania). representatives and members of In this context, economic actors the EPP, then the PES, then the must fi rst target the elected liberal–democratic family, but also representatives and members of have an overall strategy towards the EPP, then the PES, then the the three components of the liberal–democratic family, but also more or less informal “grand have an overall strategy towards coalition” whose compromises willthe shapethree componentsthe EU’s decisions of the in the comingmore or quarters.less informal “grand coalition” whose compromises will shape the EU’s decisions in the 1.2coming Strong politicalquarters. infl uence of the Greens and the extreme right

Ursula Von Der Leyen has chosen the “Green Deal” as the fi rst priority for the 2019– 20241.2 Strong legislature, political even infl though uence ofthe the Green Greens parties and are the in extreme a weak position right in the three EU institutions: this calls on economic actors to favour a more political than institutional interpretationUrsula Von Der of Leyen the newhas chosenpartisan the power “Green relations Deal” as, and the therefore fi rst priority to integrate for the 2019– two other2024 legislature, actors into eventheir thoughinfl uence the strategies: Green parties are in a weak position in the three EU .institutions: on the one this hand, calls the on “Greens”economic who, actors supported to favour bya more public political opinion, than will institutional continue to interpretationhave a powerful of theinfl uence new partisan on EU policies power onrelations climate,, and environmental, therefore to economic,integrate two so- othercial and actors perhaps into their external infl uence issues; strategies: . on the otherone hand, hand, the members “Greens” of who, the Euroscepticsupported by right public and opinion, the extreme will continue right, who to haverepresent a powerful more thaninfl uence 20% onof theEU policiesEuropean on Parliament, climate, environmental, sit in several economic,national gov- so- cialernments and perhaps and have external given issues; decisive votes to Ursula Von Der Leyen’s nomination: this . onpolitical–institutional the other hand, members infl uence of could the Eurosceptic lead the more right mainstream and the extreme parties right,to yield who to theirrepresent pressure more in thethan face 20% of migration,of the European trade, securityParliament, and neighbourhoodsit in several national challenges gov- (enlargement).ernments and have given decisive votes to Ursula Von Der Leyen’s nomination: this political–institutional infl uence could lead the more mainstream parties to yield to 1.3.their More pressure uncertain in the and face therefore of migration, more trade, open security partisan and negotiations neighbourhood challenges (enlargement). Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- come1.3. More of the uncertain new partisan and therefore power relations more open at European partisan level negotiations now appears much more uncertain. Even if the EPP–ESP duopoly continues to remain at the centre of the game, the out- Thiscome new of the partisan new partisan situation power is likely relations to weaken at European the EU’s levelability now to appearstake bold much initiatives more and,uncertain. even worse, take rapid and coherent decisions: it must be understood by eco- nomic actors according to whether they have an interest in the status quo or, on the contrary,This new whetherpartisan situationthey need is a likely dynamic to weaken and entrepreneurial the EU’s ability EU. to take bold initiatives and, even worse, take rapid and coherent decisions: it must be understood by eco- nomicIn this actors more according fl uid and to open whether context, they have an interest in the status quo or, on the contrary,it is also whether up to economic they need aactors dynamic to and entrepreneurial EU. adapt fi ner infl uence strategies, In this more fl uid and open context, which can target key supporters it is also up to economic actors to in relation to the issue at hand and adapt fi ner infl uence strategies, according to their offensive or which can target key supporters defensive interests. in relation to the issue at hand and according to their offensive or defensive interests.

2 MORE STRAINED INTER–INSTITUTIONAL2 POWER RELATIONS The diffi culties encountered during the hearing of the Commissioners–designateMORE STRAINED INTER–INSTITUTIONAL and the postponement POWER of RELATIONS the start of the Von Der Leyen Commission refl ect tensions that are not new, but whoseThe intensity diffi culties will haveencountered an impact during on the the functioning hearing of of the the EU Commissioners–designatein the coming months and and years. the Economic postponement actors of must the startboth oftake the theVon measure Der Leyen of thisCommission and support refl ectthe tensions institution that or areinstitutions not new, most but whose intensity willfavourable have an impactto their on interests. the functioning of the EU in the coming months and years. Economic actors must both take the measure of this and support the institution or institutions most 2.1. A European Parliamentfavourable that is more to assertive their interests.

European parliamentarians were elected on the basis of a turnout of more than 50%, which2.1. A European strengthens Parliament their legitimacy that is more and assertivetheir desire to be heard. The hearings of the Commissioners appointed by the Member States resulted in the rejection of three can- didates:European this parliamentarians is the fi rst time were that electedthe European on the basisParliament of a turnout has been of more so harsh, than and 50%, it illustrateswhich strengthens its desire to their assert legitimacy itself vis-à-vis and thetheir Commission desire to be and heard. also The the hearings Council, whichof the economicCommissioners actors appointed will have to by take the intoMember account States throughout resulted in the the 2019–2024 rejection cycle.of three can- didates: this is the fi rst time that the European Parliament has been so harsh, and it Inillustrates order to its push desire their to advantage assert itself but vis-à-vis also to the highlight Commission their difference, and also the it is Council, very likely which that MEPseconomic will actorsbe particularly will have toaggressive take into accounton the issuesthroughout they considerthe 2019–2024 to be cycle. in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumerIn order to pushand data their protection, advantage not but to also mention to highlight the promotion their difference, of mobility it is very and likely trade that or, inMEPs external will bematters, particularly support aggressive for human on rights the andissues development they consider aid. to be in line with the expectations of their voters: fi rst and foremost environment and climate, but also consumer and data protection, not to mention the promotion of mobility and trade or, 2.2.in external A weaker matters, Commission support torn for human between rights the andCouncil development and the European aid. Parliament?

The profi le and surprise choice of Ursula Von Der Leyen, after an unsuccessful fi rst European2.2. A weaker Council, Commission puts her torn in a betweenweaker position the Council than and her the predecessor European Parliament?Jean-Claude Juncker, longtime head of government and inducted by her former peers on the ba- sisThe of profi the le“spitzenkandidaten” and surprise choice procedure of Ursula promoted Von Der Leyen,by the Europeanafter an unsuccessful Parliament. fi rst European Council, puts her in a weaker position than her predecessor Jean-Claude ItJuncker is also ,noteworthy longtime head that of the government two new executive and inducted vice-presidencies by her former entrusted peers on theto Mar- ba- garetsis of theVestager “spitzenkandidaten” and Franz Timmermans procedure werepromoted imposed by the on EuropeanUrsula Von Parliament. Der Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erenceIt is also to noteworthy the system that of “spitzenkandidaten”—this the two new executive vice-presidencies “triumvirate” being entrusted completed to Mar- by Valdisgaret VestagerDombrovskis and asFranz 3rd TimmermansExecutive Vice-President, were imposed at the on newUrsula President’s Von Der initiative.Leyen, on the basis of a compromise reached by the European Council and with explicit ref- erence to the system of “spitzenkandidaten”—this “triumvirate” being completed by Valdis Dombrovskis as 3rd Executive Vice-President, at the new President’s initiative.

© European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans © Olaf Kosinsky|

It remains to be confi rmed that this new hierarchical organisation of the European © European Union 2019 Source: EP Source: Union 2019 © European Margrethe Vestager Margrethe Frans Timmermans Commission will enable it to be as proactive and coherent as necessary (while© Olaf Kosinsky| its par- tisan composition is more diverse than the previous one) and whether it will be able toIt remainsassert itself to be properly confi rmed vis-à-vis that the this European new hierarchical Council and organisation Parliament. of the European Commission will enable it to be as proactive and coherent as necessary (while its par- Thetisan fact composition that the “Brussels is more diverse College” than can the take previous its decisions one) and by whethera simple itmajority will be able is a usefulto assert institutional itself properly safeguard vis-à-vis to the guarantee European its Council ability to and decide, Parliament. but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied.The fact that the “Brussels College” can take its decisions by a simple majority is a useful institutional safeguard to guarantee its ability to decide, but does not guaran- tee the political coherence of its initiatives, nor its ability to have them adopted and applied. 3 MORE CONFLICTUAL DIPLOMATIC3 POWER RELATIONS In June, the Heads of State and Government adopted a 2019–2024 agenda4MORE of a few CONFLICTUAL pages formalizing DIPLOMATIC a global POWER consensus RELATIONS on priority political orientations in a geopolitical context pushing Europeans to uniteIn June, more the (Russia, Heads Trump, of State China, and GovernmentBrexit, Erdogan,...). adopted This a 2019–2024 proclaimed desireagenda for4 ofunity a few nevertheless pages formalizing conceals a globalsignifi cantconsensus tensions on between priority Memberpolitical orientationsStates, which in will a geopolitical be resolved context on the basispushing of a Europeans more or less to openunite strugglemore (Russia, for infl Trump, uence ,China, in which Brexit, economic Erdogan,...). actors This must proclaimed take part. desire for unity nevertheless conceals signifi cant tensions between Member States, which will be resolved on the basis of a more or less 3.1. Markedopen struggle dividing for lines infl in uence the Council, in which economic actors must take part.

The 2019–2024 political cycle opens with the fractures that marked the two previous cycles3.1. Marked still to dividing be resolved, lines and in the can Council be described in a schematic way: . “North–South” (or centre–periphery) divisions generated by the “euro zone crisis” Theon 2019–2024economic, political social and cycle budgetary opens with issues the, fracturesand personalised that marked by the the opposition two previous be- cyclestween still the to “new be resolved, Hanseatic and League” can be 5described and the “Med in a schematic 7” summits way:6; . “East–West” “North–South” fractures (or centre–periphery) generated by the divisions destabilization generated of byour the neighbourhood “euro zone crisis” and theon economic, “refugee crisis” social in and terms budgetary of migration, issues identity, and personalised and security by , thewhich opposition crystallized be- 5 6 withtween the the affi “new rmation Hanseatic of the League” Visegrad and Group the (Hungary,“Med 7” summits Poland, ;Slovakia, Czech Re- . public).“East–West” fractures generated by the destabilization of our neighbourhood and the “refugee crisis” in terms of migration, identity and security, which crystallized Anotherwith the dividing affi rmation line is of undoubtedly the Visegrad emerging Group (Hungary, between Poland, countries Slovakia, which, Czechunder Re-the aegispublic). of France, want to promote profound changes to the EU (from “Refoundation” to “Renaissance”) and those which accept a relative status quo, of which Germany is Anotherundoubtedly dividing a part: line if is Europeans’ undoubtedly control emerging of their between collective countries security which, can constituteunder the aegisa common of France, horizon want, it to is promote not the sameprofound for all changes that concerns to the EUfi scal (from and “Refoundation” social conver- togence, “Renaissance”) industrial policy, and those trade which policy, accept etc. a relative status quo, of which Germany is undoubtedly a part: if Europeans’ control of their collective security can constitute a Incommon this context, horizon the, it isrisks not ofthe tensions same for andall that concerns fi scal and social conver- gence,blockages industrial in the policy, Council trade policy,are all etc. the greater as Member States take many essential In this context, the risks of tensions and decisions unanimously. These risks seem blockages in the Council are all the greater all the more acute as it will be tempting for as Member States take many essential many external powers more or less hostile decisions unanimously. These risks seem to the EU (Russia, China, USA, Turkey, soon all the more acute as it will be tempting for the UK, etc.) to put pressure on individual many more or less hostile Memberexternal States powers to prevent the adoption of to the EU (Russia, China, USA, Turkey, soon ambitious European initiatives. the UK, etc.) to put pressure on individual The further development of a variable Member States to prevent the adoption of geometry Europe, based on more ambitious European initiatives. intergovernmental mechanisms, could be The further development of a the outcome of such confl ictingvariable pressures , based on more –togeometry be anticipated Europe by economic actors. intergovernmental mechanisms, could be the outcome of such confl icting pressures 3.2.–to A be heterogeneous anticipated inflby uenceeconomic within actors. the European institutions

The leadership exercised by the European Council and the Council must lead eco- nomic3.2. A heterogeneous actors to adjust infltheir uence strategy within of infl the uence European to the institutionsevolution of diplomatic power relations at the beginning of the 2019–2024 cycle. This should in particular encourage themThe leadership to give priority exercised to actions by the and European contacts Council with: and the Council must lead eco- .nomic German actors decision-makers to adjust their ,strategy who are of more infl uence infl uential to the thanevolution ever ofin diplomatic the Commission power relations(presidency) at the and beginning the European of the 2019–2024 Parliament cycle. (1st national This should delegation in particular to the encourage EPP and themthe Greens) to give priorityand remain to actions essential and incontacts the Council, with: despite the announced end of the . German Merkel era decision-makers by 2021; , who are more infl uential than ever in the Commission st . (presidency)Spanish and and French the decision-makers:European Parliament the Spanish (1 national because delegation they are to the infl uential EPP and in the Greens) European and Parliament remain essential (1st national in the delegation Council, despite to the the S&D announced group), the end Commis- of the sionMerkel (High era Representative)by 2021; and the Council (likely re-election of Pedro Sanchez); the . French Spanish because and French their decision-makers: President is one ofthe the Spanish leaders because of the European they are Council, infl uential their in Commissionerthe European Parliamentholds a strategic (1st national economic delegation portfolio to and the their S&D elected group), representatives the Commis- cansion play(High a Representative)pivotal role in the and European the Council Parliament (likely re-election (as the 1st ofnational Pedro Sanchez);delegation the to Frenchthe Renew because group). their President is one of the leaders of the European Council, their . Commissioner nationals of four holds other a strategic countries economic must also portfolio be the subjectand their of elected a specifi representatives c strategy: the st canDutch play, given a pivotal their role government’s in the European desire Parliament to assert post-Brexit (as the 1 nationalliberal leadership delegation and to Franzthe Renew Timmermans’ group). presence in the Commission’s Vice Presidency on the climate . portfolio;nationals toof afour lesser other extent countries Italians, must Romanians also be theand subject Poles, givenof a specifi their cimportant strategy: thepo- sitionsDutch , ingiven the Commission,their government’s the European desire toParliament assert post-Brexit and the Council. liberal leadership and . Franzall other Timmermans’ EU countries presence must be monitoredin the Commission’s and strategically Vice Presidency adapted according on the climate to the economicportfolio; to interests a lesser toextent be defended Italians, Romaniansand over the and course Poles of, thegiven rotating their important Council Pres- po- idencies.sitions in the Commission, the European Parliament and the Council. . all other EU countries must be monitored and strategically adapted according to the economic interests to be defended and over the course of the rotating Council Pres- idencies. . It is by understanding these triple partisan, institutional and diplomatic power relations that economic. actors must anticipate and shape the main political orientations likely to prevail at EU level and identifyIt is by the understanding strategic trade-offs these triple that needpartisan, to be institutional infl uenced duringand diplomatic power relationsthe 2019–2024 that economic legislative actors cycle. must anticipate and shape the main political orientations likely to prevail at EU level and identify the strategic trade-offs that need to be infl uenced during the 2019–2024. legislative cycle. By Yves Bertoncini, Senior Advisor at APCO Worldwide

1 See “A Union that strives for more My agenda for Europe”, Ursula Von der Leyen July 2019 https://ec.europa.eu/commission/sites/beta-political/fi les/political-guidelines-next-commission_fr.pdf By Yves Bertoncini, Senior Advisor at APCO Worldwide 2 See her November speech: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408 3 The partisan balance of power in the Council is more balanced since the Romanian government is led by a liberal 1 See(while “A theUnion Romanian that strives President for more is aMy member agenda of for the Europe”, EPP) and Ursula the ItalianVon der government, Leyen July 2019 whose leader is considered https://ec.europa.eu/commission/sites/beta-political/fi“independent”, is composed of many social democratic les/political-guidelines-next-commission_fr.pdf (and “5-star”) ministers. 2 4 See See her“A new November strategic speech: agenda 2019-2024”, European Council, June 2019: https://ec.europa.eu/commission/presscorner/detail/en/speech_19_6408https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 3 5 TheCreated partisan in 2018, balance “Hansa” of power brings in together the Council Denmark, is more Estonia, balanced Finland, since Ireland,the Romanian Latvia, Lithuania,government is led by a liberal (whilethe Netherlands the Romanian and Sweden.President is a member of the EPP) and the Italian government, whose leader is considered 6 “independent”, Since 2016, the “Medis composed 7” summits of many bring social together democratic Portugal, (and Spain, “5-star”) France, ministers. Italy, Malta, Greece and Cyprus. 4 See “A new strategic agenda 2019-2024”, European Council, June 2019: https://www.consilium.europa.eu/media/39916/a-new-strategic-agenda-2019-2024-fr.pdf 5 Created in 2018, “Hansa” brings together Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden. ABOUT6 Since 2016, AMCHAM the “Med 7” summits bring together Portugal, Spain, France, Italy, Malta, Greece and Cyprus. AmCham represents companies committed to the transatlantic relationship. Founded in 1894 to promote economic exchanges between France and the United States, AmCham gathers today 250 French, American, and European companies of all sizes and from a wide range of economic sectors. As an independent institution, AmCham helps bring new ideas to the public debate, particularly with a view to strengthening France’s attractiveness. In this perspective, AmChamABOUT AMCHAM has many working groups that develop recommendations in the form of white papers and policy papers. In addition,AmCham as represents a platform companies for discussion committed among high-levelto the transatlantic offi cials from relationship. both the publicFounded and in the 1894 private to promote sphere, economicAmCham regularlyexchanges brings between together France leading and political, the United business, States, and AmCham intellectuals gathers fi gures. today These 250 French,meetings American, provide an and opportunity European forcompanies in-depth of debates all sizes andand exchangesfrom a wide on range various of economic economic, sectors. social, Asand an geopolitical independent issues, institution, particularly AmCham those helps related bring to thenew evolution ideas to theof the public transatlantic debate, particularly relationship. with Lastly, a view AmCham to strengthening is devoted France’sto the societal attractiveness. issues that In arethis centralperspective, to its members’AmCham hasactivities many and working is therefore groups committed that develop to severalrecommendations initiatives on in the the themes form of of white diversity, papers inclusion and policy and innovation. papers. In addition, as a platform for discussion among high-level offi cials from both the public and the private sphere, AmCham regularly brings together leading political, business, and intellectuals fi gures. These meetings provide an opportunity for in-depth debates and exchanges on various economic, social, and geopolitical issues, particularly those related to the evolution of the transatlantic relationship. Lastly, AmCham is devoted to the societal issues that are central to its ABOUTmembers’ APCO activities WORLDWIDE and is therefore committed to several initiatives on the themes of diversity, inclusion and innovation. APCO Worldwide is an advisory and advocacy communications consultancy helping leading public and private sector organizations act with agility, and build organizational reputations, brands, relationships and solutions to succeed. APCO Worldwide has operated in France for nearly 20 years. Our offi ce in Paris provides clients with an integrated offer combining corporate communication, crisis management and public affairs. The team is particularly experienced atABOUT assisting APCO clients WORLDWIDE at critical junctures for their organizations in France and internationally: for instance, at times of regulatoryAPCO Worldwide or legislative is an advisory change; andin preparation advocacy communications for complex fi nancial consultancy transactions helping and leading acquisitions; public during and private high stakessector reputationalorganizations challenges act with agility,and crisis and situations; build organizational and at times reputations, of potentially brands, disruptive relationships innovation. and With solutions a diverse to succeed.range of clientsAPCO Worldwidefrom multinational has operated companies in France to trade for nearlyassociations 20 years. and Our NGOs offi APCO ce in hasParis particularly provides clients strong withexpertise an integrated in FMCG, healthoffer combining care, fi nance, corporate technology, communication, energy and crisis transportation. management and public affairs. The team is particularly experienced at assisting clients at critical junctures for their organizations in France and internationally: for instance, at times of regulatory or legislative change; in preparation for complex fi nancial transactions and acquisitions; during high stakes reputational challenges and crisis situations; and at times of potentially disruptive innovation. With a diverse range of clients from multinational companies to trade associations and NGOs APCO has particularly strong expertise in FMCG, healthAMCHAM care, — fi 77nance, RUE technology,DE MIROMESNIL energy — and 75008 transportation. PARIS, FRANCE — WWW.AMCHAMFRANCE.ORG — +33 1 56 43 45 63

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