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WRAPUP 3-EU names new Commission to boost economy

Published 11/27/2009, 12:29 PM

* Barroso names executive to tackle growth, raise influence

* Finn Rehn, Spain's Almunia get top economic jobs

* New EU Commission needs European Parliament's approval (Edits, adds Rehn, Hague quotes)

By Darren Ennis and Timothy Heritage

BRUSSELS, Nov 27 (Reuters) - Finnish liberal Olli Rehn will oversee efforts to revive Europe's economy and France's Michel Barnier will have an important role reforming financial services in the new European Commission unveiled on Friday.

Jose Manuel Barroso, president of the European Union's executive, announced a 27-person team which he said would make boosting economic growth its priority and described it as a "perfect blend of experience and new thinking".

Rehn takes over as economic affairs chief from Spaniard Joaquin Almunia, who will be competition commissioner in a line-up that includes a climate change portfolio, underlining the importance the EU attaches to combating global warming.

"In five years' time, I want this Commission to have been instrumental in leading Europe out of the economic crisis towards a competitive economy that provides sustainable growth," Barroso told a news conference.

The formation of the Commission, which has strong regulatory and law-making powers, is the latest stage in the EU's efforts to increase its influence after the economic crisis and follows ratification of a treaty to make decision-making smoother.

Serving for five years, the Commission represents a bloc of 27 countries and nearly 500 million people that is struggling to match the rise of emerging powers such as China.

It includes nine women, one more than the last Commission, and is balanced among centre-right and centre-left politicians. It needs the approval of the European Parliament to take office and will probably do so next February.

ECONOMIC CHALLENGES

A week after EU leaders named little-known Belgian Prime Minister Herman Van Rompuy as the bloc's president, and low-key Briton Catherine Ashton as foreign policy chief, Barroso has included few household names in his team.

Central to economic recovery will be reducing budget deficits and deciding when to stop emergency financial measures that were used to prop up the economy. Gross domestic product is expected to rise by only about 0.7 percent in 2010.

Rehn, 47, has overseen the accession of Romania and Bulgaria as EU enlargement commissioner but has limited experience in economic policy-making.

He told national Finnish broadcaster YLE that challenges he faced included boosting employment -- unemployment is expected to rise above 10 percent in the EU next year -- and said Europe must be greener, more innovative and more competent.

"You cannot just pick one or two countries, rather growth will only come through the cooperation of all the member states and the Commission," he said.

Almunia, a 61-year-old Socialist, has won a reputation for fiscal prudence as economic and monetary affairs commissioner. As competition commissioner he must enforce rules on state aid, prevent protectionism and uphold the EU's single market.

"Both men are (among) ... Barroso's top lieutenants and they are seen as safe pairs of hands," an EU envoy said. "In making these appointments, Barroso keeps tight control on two top jobs and keeps Paris, Berlin and London's hands off them."

BATTLE OVER FINANCIAL SERVICES

The appointment of Barnier, 58, a former French agriculture and foreign minister, is more controversial because of the role he will have in overseeing a radical revamp of financial regulations to prevent any new economic crisis.

His nomination could worry financiers in London, Europe's biggest financial centre, who are fighting to water down proposed new rules on issues such as bankers' pay and curbs on hedge funds. France is seen as favouring tough regulation.

"It is a victory for the French," said Hugo Brady, an analyst at the Centre for European Reform think tank.

EU diplomats said Barnier would appoint Jonathan Faull, a senior British civil servant in the Commission, to lead his department to allay suspicions that Paris will pursue its own interests in pushing for strict regulations on banks.

Other nominations included Denmark's Connie Hedegaard as climate action commissioner. Germany's Guenther Oettinger will be in charge of energy and Romanian Dacian Ciolos will have the agriculture portfolio. ((For more on the EU, please double click on [EU/LOOK])) (Additional reporting by Breet Young in Helsinki and Keith Weir in London; editing by Myra MacDonald) ((Brussels Newsroom, Tel:+32-2 287 6830; Fax:+32-2 230 7710; brussels.newsroom@reuters.com))

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