Verheugen's Fall from Grace Political Scandal Hits the EU

European Union Commisioner Günter Verheugen is becoming a burden for Germany's upcoming European Commission presidency. His controversial private life has triggered speculation over Verheugen's possible resignation.

The world no longer makes sense to Günter Verheugen, who suddenly finds himself in the spotlight but can't understand why.

Deeply offended, he ducks into the protective wing chairs in his office on the 16th floor of the glass behemoth in Brussels where the European Commission runs Europe. Verheugen has been in politics for 37 years. He began his career in Germany's Free Democratic Party (FDP), later switched to the Social Democratic Party (SPD), became a minister of state in the German Foreign Ministry and has been in his current position as a commissioner at the European Union in Brussels since 1999. But he has never experienced "this sort of thing," he says, gazing into the distance.

He is being criticized from all quarters, literally bombarded with malice and derision. And why? What exactly has he done? "I have an extremely impressive record," he says. And he keeps repeating the same phrase, with growing emphasis: "The accusations of favoritism are completely off the mark."

Verheugen seems powerless, resigned and light-years away from the reality of a Europe he still believes he is helping to shape. "The man is in a hole and can't get out," says Inge Grässle, a member of the European Parliament and of Germany's conservative Christian Democratic Union (CDU). She's right: Verheugen's situation couldn't be worse.

From star to problem case

In only two years as the EU's commissioner for industry, Verheugen has gone from being a celebrated star to a problem case. His successes have been modest. His attempts to market himself for other top posts, such as Germany's foreign minister, have failed. And his relationship with the powerful Brussels bureaucracy is now hopelessly in shambles -- so much so that cooperation seems almost completely impossible these days.

As if that weren't enough, the married 62-year-old is now coming under scrutiny in his private life. A photo of the commissioner on vacation in Lithuania, holding hands with a 48-year-old woman, recently surfaced in the press, apparently confirming the malicious rumors Grässle claims have been "making the rounds in Brussels for a long time." Far from some anonymous acquaintance, the woman in the damaging photo is Petra Erler, a close associate of Verheugen since 1999. This spring Erler was promoted to director of Verheugen's cabinet, a career move that comes with a raise from salary group A 12 (€9,045 a month) to A 14 (€11,579 a month).

Markus Ferber, a Member of the European Parliament, representing Germany's conservative Christian Social Union (CSU), isn't the only one who suspects that Erler's "professional qualifications were not the only factor" in her promotion, and has demanded that Verheugen "dispel charges of favoritism."

Some are already speculating over Verheugen's resignation, even conjuring up memories of French Commissioner Edith Cresson, who helped secure a job for a friend, a dentist, in the late 1990s. The ensuing public charges of corruption led to the resignation of the entire commission.

But that point is still a long way off in the current situation. The commission, his fellow SPD members and the government in Berlin are all supporting Verheugen -- officially, at least. But even German Chancellor Angela Merkel has been having a problem with her man in Brussels for some time now. When Germany assumes the six-month revolving EU presidency at the beginning of 2007, Merkel hopes to promote a more positive feeling about Europe among its citizens by untangling some of the Brussels bureaucracy. But now that Merkel's most important advocate in that body, Verheugen, has come under such hefty criticism, "we have lost our contact in Brussels," complains one member of the administration in Berlin.

And what a letdown it has been. When Verheugen took office, he was armed with a host of interdepartmental powers to ensure that he could be an influential commissioner, a man who would watch with Argus eyes to make sure that the interests of the economy were properly represented in Brussels, thereby spurring new growth within the faltering EU.

A bad idea?

That, at least, was what then Chancellor Gerhard Schröder had in mind when he demanded, in June 2004, that Germany, as Europe's biggest economic power, be granted the position of EU industry commissioner and vice-president of the European Commission and proposed Verheugen, then the organization's well-respected expansion commissioner, for the job. But Verheugen's appointment was a bad idea from the start, and then-opposition leader Angela Merkel wasn't the only one to publicly question the experienced foreign policy expert's qualifications for the new position. Business, industry and even his colleagues within the European Commission were skeptical about the SPD politician's appointment.

Verheugen was overly sensitive in reacting to the criticism, even telling journalists that he would "no longer answer" questions about his lack of qualifications. Instead of facing his critics, shortly after taking office in November 2004 the new industry commissioner promptly set extremely ambitious goals in an effort to convince his skeptical colleagues that he was indeed qualified for the job.

Verheugen would have been better off taking a less ambitious approach. His first venture, an attempt to breathe new life into the so-called Lisbon Agenda -- which aimed to make Europe "the most competitive place to do business by 2010" -- fell well short of expectations. As the principal coordinator of all economic issues, Verheugen sought to revive the EU's economic strength with billions in subsidies for innovation, research and teaching. Under his leadership, he hoped, all of Brussels' future efforts would be in pursuit of a single overriding goal: "jobs, jobs, jobs."

But little came of it. Verheugen's efforts to convince member states to support his program were unsuccessful. To this day, all he has managed to achieve are a series of more or less non-binding declarations of intent to spur economic growth.

Bound by bureaucracy

And yet Verheugen remained undeterred, switching his focus from generating employment to downsizing EU bureaucracy, which he says was "at the top of the agenda." Under the new strategy, hundreds of old laws were to be reviewed for possible simplification or even elimination, and new guidelines were to be drafted with an eye to their impact on industry. Consistent implementation of his ideas, said an enthusiastic Verheugen, could increase growth by two or three percentage points.

But this project also made little headway. Although the Commission announced its plans to remove about 60 laws from the books, many were little more than transitional pieces of legislation that would have expired eventually, anyway. Indeed, very little legislation was actually eliminated, and those laws that were taken off the books tended to be insignificant rules such as a requirement to sell coffee and sugar in standardized package sizes only.

Verheugen has a completely different take on his performance. "I changed the European agenda," he says. He even has a feeble explanation for the fact that citizens and businesses have seen little benefit from all of his plans, position papers, declarations of intent and committees. In a recent interview, he blamed what he characterized as the far too powerful Brussels bureaucracy for the failures of his programs, claiming that it has blocked reforms and efforts at simplification because it disagreed with the new course.

But a few days later Verheugen, unable to offer convincing proof to substantiate his frontal attacks against the bureaucracy, embarked on a disorderly retreat, his employees at his heels. The European Commission's staff union, FFPE, demanded an apology and suggested that the commissioner resign. As a result of the rash criticism, says Hartmut Nassauer, chairman of the CDU/CSU group in the European Parliament, Verheugen "did a disservice to a good cause."

"A very close, trusting relationship"

The beleaguered Verheugen apparently found some comfort in the company of Petra Erler, who had worked with him for years and with whom, as he says, he has a "very close, trusting relationship." Indeed, the two were frequently seen dining or walking together, buying lamps for the office or a tuxedo for Günter. Rumors about the cozy couple had been swirling in Brussels for some time, but their private relationship only became relevant in April, when Erler was promoted to one of the highest-ranking positions within the EU: director of Commissioner Verheugen's cabinet.

There was never any doubt about her qualifications. On the strength of her 1987 dissertation at the East German Law Academy, she was certainly qualified as an expert on Europe -- though one critical of capitalism, at least at the time. The title of her doctoral thesis was: "The Content and Fundamental Directions of the Collective National Monopolistic Regulation of Foreign Trade in the States of the European Community."

Later, as a state secretary in the last East German government, under Lothar de Maizière, she was even current German Chancellor Angela Merkel's boss for a short time. Merkel's position in that administration was that of deputy government spokesperson. After German reunification, Erler went to Bonn and, in 1999, to Brussels -- together with Verheugen -- where she headed the negotiations over the EU membership of Poland the Baltic states. Her work, said her boss, "was simply outstanding."

Indeed, Erler was so good at her job that Verheugen felt that it was "imperative" that she be named director of his cabinet when her predecessor took a job with the Foreign Ministry in Berlin. "Anything else," he says, "would have been discrimination."

None of that presented a problem, at least not until the "joint meeting during vacation time," as Verheugen likes to call his Lithuanian vacation with Erler, became known and the press published the photo of what appeared to be a handholding pair of lovebirds. According to Verheugen, their relationship has never been "more than a friendship," neither today nor when Erler was appointed to her new position in April.

And what happened in the interim, during their vacation? "Can't two adults do as they wish in their private lives?" he asks, adding that he never concealed anything, "zero, nothing, absolutely nothing at all." Indeed, Verheugen says that he and Erler appeared together on Lithuanian television and posed for photographers, and that even his wife was in the loop. Of what, he insists, could he be accused?

For one thing, there is the EU Commission's Code of Conduct for Commissioners, which Verheugen helped draft. The introduction to that document clearly states: "The general interest requires that in their official and private lives Commissioners should behave in a manner that is in keeping with the dignity of their office. Ruling out all risks of a conflict of interests helps to guarantee their independence."

Translated from the German by Christopher Sultan

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