December 7, 2009

On November 27th, European Commission President Barroso appointed fellow Iberian and close political ally Joaquín Almunia as the next EU Commissioner for Competition, shifting Mr. Almunia (currently Commissioner for Economic and Monetary Affairs) from one hot seat into an even hotter one. So who is this economist turned politician from Madrid (born Bilbao), why is his nomination getting such universal approval despite an apparent lack of competition experience and what can we expect from him? The answer to the all important third question is maddeningly elusive for someone who has been at the top levels of European politics for 25 years, but we are beginning to get a clearer picture about who he is and how he will approach his new role. 

Almunia certainly has the CV of the prototypical modern European, with degrees from Deusto, The Sorbonne and Harvard (law, economics & government) under his belt before taking a job with the Spanish chamber of Commerce in Brussels in 1972. In 1976, at the age of 28, Almunia became the chief economist of the Unión General de Trabajadores, the Spanish trade union affiliated with the Spanish Socialist Workers' Party ("PSOE"); and in 1979 he completed the transition from economist to politician, becoming a member of the Cortes Generales, representing Madrid. From there a steady climb to the top of Spanish politics (he was in 1982, at the age of 34, the youngest minister in Felipe Gonzalez's cabinet) culminating in leading the PSOE for three years in the late '90s and then his disastrous loss to encumbent Prime Minister Jose Maria Aznar in which the PSOE lost 16 seats and 7% of the popular vote. Resignation as party leader followed (it actually occurred on election day) as did a period of  semi-political exile during which he founded "progressive" think tank "Laboratorio de Alternativas."

Politics in Europe are endlessly fascinating, however,  and experience, relative youth, party loyalty and arguably the Madrid bombings soon had Almunia fully employed again, this time as a Commissioner in the last days of Romano Prodi's Commission. On March 11, 2004, three days before the general election, Madrid was bombed. The impact of the bombing on the general election will be forever debated, but what is certain is that the PSOE returned to power, new Prime Minister Zapatero asked then Commisioner Pedro Solbes to quit Brussels to join his government and Joaquin Almunia was named as Solbes's replacement. Interestingly, President Zapatero has now reappeared in the mix, rumored to have leaned on old friend Barroso to give Almunia another plum job in the next Commission.

Given a strong left-wing political background and the fact that he has played politics at the highest level in a country where politics are played very hard indeed, one would expect to find more policy, more bluster and more sound-bites in Almunia's wake, but they just don't seem to be there. From his bio, and from this curious lack of a trail (although the lack of a trail is hardly as useful as the presence of one), one is tempted to draw several two-dimensional conclusions as to how he will approach his new job and why commentators are not particularly bothered by his lack of competition experience. Mr Almunia, despite his strong party affiliation, is clearly not an idealogue, he is also loyal and doesn't believe in public fights. His record would seem to also show that he is both discrete and content to immerse himself in substantive issues out of the spotlight. He makes and keeps political friends.

Law firms have produced some great (and diverse) material which provide a lot more light on the man and his methods.

From Cleary Gottlieb: "Mr. Almunia ... is considered to be a thoughtful, careful, hard-working, and clear-minded regulator. He is close to Commission President Barroso, who was apparently keen for him to accept the position....there are no indications that he intends to deviate to any material extent ... He is a “believer in markets” who is not thought to have disagreed with any of the decisions proposed by Commissioner Kroes."

From Dechert: "As the monetary commissioner, Almunia earned respect for scrutinizing the Member States’ public finances and their budgetary policies during the global financial crisis and for managing the expansion of the euro to additional Member States ...Commissioner Almunia’s academic preparation, expertise and his previous experience in the economy post, seem to be a good blend to drive the Competition Commission in a reasonable, but also diplomatic way....Almunia knows the Commission inside out."

From McDermott Will & Emery: "Commission President José Manuel Barroso pointed out the determination and courage with which Almunia had addressed difficult issues with national governments.  In general, Almunia is seen as Barroso's choice of a close ally for a key position."

Jones Day: "Commission’s officials who have worked closely with Mr. Almunia say he is a competent and reflective person, who “likes to get into the details of his dossiers” and carefully listens and evaluates pros and cons before making any important decision.  Several persons inside the Commission have stated that, due to his solid economic and legal background, he will be able rapidly to familiarize himself with the competition portfolio and gain the confidence of the services that report to him."

Crowell Moring:  "The nomination follows requests by Spain 's president Jose Luis Rodriguez Zapatero that Mr. Barroso gives the Spanish Commissioner Almunia a "key" economic portfolio. Mr. Barroso is said to owe Mr. Zapatero a favor for his support of Mr. Barroso's re-election in the face of opposition by the European Socialist group."

Skadden: "The appointment of a trusted, seasoned official with an extensive economics background, who also is close to Mr. Barroso and has already had significant exposure to the financial crisis, suggests that the crisis and its aftermath will continue to dominate the Commission’s agenda."

Morgan Lewis: "Mr Almunia ... earned widespread praise for his handling of the economic crisis and gained a solid reputation for independence and fiscal prudence...is a trained economist and lawyer, a background that should serve him well in his new role."  Click for More.