Guenter Verheugen's Rising Star

Europe's administrators, the "Commissioners," often dine high up on the 14th floor of the Berlaymont Building in Brussels, which houses the European Commission. When 64-year-old Günter Verheugen had lunch there last Wednesday, he was in high spirits.

Speaking in praise of himself, he said that for weeks he had displayed "a firm hand and a cool head" while fighting for his plan to help Brussels find its own role in the economic crisis. That morning, the Commission had agreed on a plan that it now plans to present to the heads of state and government of the 27 member states when they come together for a summit meeting at the end of next week. Much of the plan bears Verheugen's handwriting. "I achieved everything I wanted," he says proudly.

Verheugen of the center-left Social Democratic Party—the man former German Chancellor Gerhard Schrýder sent to EU headquarters 10 years ago to serve as a "super-commissioner"—has not been this satisfied and self-confident in a long time. Just as the Germans' partiality for Europe was in decline, Verheugen's influence in Brussels had been on the wane. By the time he was photographed naked on a beach with a female advisor more than two years ago, he was widely viewed as politically washed up.

Now, only half a year before he is scheduled to retire, Verheugen is fighting his way back into favor, just at a time when the economic crisis threatens to derail "Project Europe." On the Wednesday in question, he even celebrated a double victory.

That morning, when the 26 commissioners and Commission President JosÉ Manuel Barroso debated their proposals to rescue the economy, there was something else for which Verheugen took credit, calling it "my achievement, to a large extent." It was something that has become quite rare: praise for German policy.

Contrary to expectations, the scrapping bonus for old cars approved by Berlin had turned out to be an excellent policy, said Joaquýn Almunia, the European Commissioner for Economic and Financial Affairs, noting that it has even helped secure jobs in his native Spain. European Commissioner for Science and Research Janez Potocnik added that in his country, Slovenia, the Germans' craving for new cars stimulated by the government program is creating new jobs among suppliers to the automotive industry.

Suddenly no one was talking anymore about Barroso's proposal to prop up the ailing European auto industry with an automotive bailout fund. Many European politicians, including French President Nicolas Sarkozy, were initially supported the plan. Only Verheugen and a few of his fellow commissioners were opposed to it.

Verheugen had argued that Brussels could not support ailing industries or even rescue companies, because it lacked both the funds and the authority to do so. The member states would have to do this on their own, he said, suggesting that the Commission ought to coordinate the national programs and perhaps come to the aid of countries with the occasional loan. But in these times, Verheugen said, the European Commission could do nothing more beneficial for the economy than refrain from doing anything that would impose additional burdens on businesses—such as new environmental or consumer protection requirements.

But Verheugen's success was also the source of new bitterness for some who saw it as even more evidence of Berlin's dominance on the Continental Europe.

Because of its size and its history, Germany has always been a problematic country for its European neighbors. "Fear of us is a part of everything," says Verheugen, describing his experiences in Brussels during the last decade. "We are admired, and yet we irritate people. This is partly because we are often right, which doesn't exactly make us more popular."

His comments are probably true. Discontent with the Germans is growing, not just in Brussels. Smaller countries, especially in Eastern Europe, "want Germany to assume the leading role," says Elmar Brok, a member of the European Parliament with Germany's conservative Christian Democrats, "and yet Berlin triggers fierce outrage when it actually assumes that role."

In an editorial for the US magazine Newsweek, Denis Macshane—a Labour Party member of parliament and Tony Blair's former Minister for Europe—described the mood of British Prime Minister Gordon Brown, when he recently read prognoses that the German economy could be in more trouble than the British economy, as "a moment of pure schadenfreude."

The London-based The Economist pointed out early on that the Germans, while valuing the Eastern European EU members as consumers of products "made in Germany," are not as enthusiastic when it comes to accepting them as competitors in the job market. Those countries on Europe's periphery that could face bankruptcy, the magazine noted, should not expect Berlin's support. Germany, The Economist wrote, was anxious not to catch the sick countries' infection, preferring to engage in typically German "economic safe sex."

Germany, "the economic locomotive of the EU," plays "the key role" in the crisis, says Portuguese President Anýbal Cavaco Silva. However, Berlin cannot fulfill these expectations of its leadership alone. Things are not going well at the moment between Germany and its most important partner, France, and a joint strategy seems out of the question. And even though Europe's political regents meet almost once every three weeks to discuss the crisis, the results have been negligible.

The European Commission in Brussels has also failed to take a leading role. It "has to be pushed too often," Brok complains. "It lacks the courage to come up with its own proposals." There is a good reason for this: Commission President Barroso, who wants to be reelected, is eager not spoil his chances with any of Europe's key politicians. And most of the 26 commissioners will be replaced by the end of the year.

Verheugen would like to take advantage of this gap in leadership. He already passed something of a screening test for the role on Jan. 26 in Turin, at Italian carmaker Fiat. Not only was he able to reminisce in a refurbished version of the carmaker's classic Cinquecento model ("I used to have one of these," he said), but he also took the wheel of a state-of-the-art, 16-meter (52-foot) Iveco-40 truck. Verheugen drove the truck slowly across a big, empty parking lot, but when he took a turn too sharply, he began to perspire and said: "I told myself that I could do it: with a firm hand and a cool head!"

Over lunch, Verheugen slices into the tender fish fillet on his plate, which the chef has carved into round shapes, and says: "It worked. I resolved to make it through the turns, here in Brussels just as I did in Turin, with a firm hand and a cool head." At the moment, his strategy appears to be succeeding.

"Verheugen is back from the dead," says Christian Democrat Brok. While Barroso's European Commission usually acts "with a mixture of knee-jerk reactions and populism," EU Parliament member Alexander Graf Lambsdorff of the business friendly Free Democratic Party characterizes the German industry commissioner as "stringent and consistent." There is even applause coming from the more provincial parts of Germany, which are normally decidedly skeptical when it comes to Brussels. Jýrg-Uwe Hahn, the new justice minister of the western state of Hesse, home to Frankfurt, expressly welcomed the language of a "regulatory pause" in the automobile industry Verheugen achieved in the Commission.

All of this has given the commissioner a boost. German automakers have just assured Verheugen that they will not be responsible for any "additional costs during the crisis." In fact, they pointed out, they would not even cut back on efforts to enhance environmental protection. Measures to improve protection for passengers and reduce nitrous oxides and soot particles, as required under future European standards, would no longer cost the projected average of €2,300 ($2,875) per car, they said. In fact, the manufacturers promised to provide the enhanced safety and environmental features at no additional cost.

The next day, a Thursday, when the EU economics ministers met in Brussels to discuss bailout programs for the auto industry, Verheugen announced his good news—and promptly upped the ante.

In light of the existential crisis at General Motors' European subsidiary Opel, he proposed a special meeting of all EU countries where Opel has production plants. These countries include, for example, Germany, Spain, Belgium and Poland. This, Verheugen argued, would allow the Europeans to effectively combine forces against the Americans.

Of course, Verheugen nominated himself as coordinator.

    Before it's here, it's on the Bloomberg Terminal.