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Spain wage cut talk ‘was misunderstood’: EU

Recent comments by the European Commission's Vice President about a possible 10 percent wage cut in Spain were misinterpreted, sources at the Commission told have The Local.

Spain wage cut talk 'was misunderstood': EU
European Commissioner Olli Rehn earns just under €23,000 a month, equal to the average annual salary in Spain. Photo: Georges Gobet/AFP

European Commissioner Olli Rehn raised ire among Spain's unions, employer groups and political parties with a blog piece he published on Wednesday.

In the blog entry, the Finn appeared to give his support to an International Monetary Fund (IMF) model which would see Spain slashing wages by 10 percent to trigger economic growth and tackle unemployment in the country.

But a senior source at the European Commission has told The Local the Vice President's comments have been misinterpreted.

Rehn's "intention was to encourage a wider discussion around the issues regarding the economy in Spain". the European Commission source said.

That source was also keen to stress that  the commissioner "was not making any new, prescriptive recommendations for Spain".

Those prescriptive measures were contained instead in the Commission's Country-specific Recommendations, the source said, adding that the recommendations had also been accepted by Spain. 

That document advises Spain to bring its budget deficit below 3 percent of GDP by 2016 through "expenditure restraint" and "revenue-increasing" measures.

The European Commission also said the Vice President's blog, which cited the examples of Ireland and Latvia, was about "encouraging all political and social stakeholders in Spain to look into other experiences in Europe with an open mind".

Rehn was not saying Spain should follow Ireland and Latvia's lead, but that the country should consider other experiences when determining its "policy mix".

The Commission's comments to The Local come in the wake of an angry response to Rehn's blog piece.

Fernando Lezcan, Secretary for Organization and Communications from the general workers union the CCOO, said Rehn's statements were "completely unacceptable" both because the IMF proposal wouldn't help Spain emerge from the crisis and for the suffering the plan would cause.

Meanwhile Elena Valenciano, second-in-command with Spain's opposition socialist PSOE party likened Rehn's support for the IMF plan to a "poisoned dart", saying "salary cuts and tax rises had made Spaniards far poorer".

"There are millions of workers (in Spain) who earn in a month what Rehn spends on two dinners," said the PSOE Vice Secretary.

The European Commissioner — also the European Commissioner for Economic and Monetary Affairs and the Euro —  earns just under €23,000 a month.

This is equal to the average annual salary in Spain, also slightly below €23,000 a year, Spain's stats office the INE said in late June.

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EUROPEAN COMMISSION

Germany’s von der Leyen elected as first woman to lead European Commission

German defence minister Ursula von der Leyen was narrowly elected president of the European Commission on Tuesday after winning over sceptical lawmakers.

Germany's von der Leyen elected as first woman to lead European Commission
von der Leyen after her election as EU head. Photo: DPA

The 60-year-old conservative was nominated to become the first woman to hold Brussels' top job last month by the leaders of the bloc's 28 member states, but to the annoyance of MEPs.

The European Parliament would have preferred a candidate chosen by one of its political groups, but in the end 383 members of the 751-member assembly
voted for her.

She will now replace Jean-Claude Juncker as head of the EU executive on November 1st, one day after Britain is due to leave the union, and serve a five-year term as head of the bloc's executive.

“The task ahead of us humbles me. It's a big responsibility and my work starts now,” the polyglot mother-of-seven told lawmakers, thanking all members “who decided to vote for me today.”

“My message to all of you is let us work together constructively, because the endeavour is a united and strong Europe,” she said, urging capitals to nominate an equal number of men and women to her commission.

If von der Leyen had lost, Brussels faced a summer of infighting instead of preparing for Brexit, battling Italy over its debt and confronting Hungary and Poland over their alleged threats to European law and values.

Instead, she won, but only narrowly.

And Poland's governing PiS party — which is facing EU action over rule of law issues and is reluctant to adopt rapid cuts in carbon emissions — was quick to remind her that her majority relied on their support.

In Brussels, officials privately admitted that the numbers were weaker than hoped, but said they had pushed on with the vote to seal the deal before the nominee was forced to make more concessions.

'A majority is a majority' 

At a news conference after the vote, von der Leyen played down the narrowness of her win, noting that a “majority is a majority” and acknowledging that some had opposed the nomination process.

“Two weeks ago I didn't have a majority because no one knew me. There was a lot of resentment because I wasn't a lead candidate,” she admitted, adding that she was happy to have built a majority so quickly.

“It's a good base to start with,” she said. The veteran minister will head briefly to Berlin on Wednesday to say farewell to her government and the German armed forces, then return to work on building an administration.

In Berlin, Chancellor Angela Merkel praised her long-time ally as a “committed and convincing European” who would “tackle with great vigour the challenges facing us as the European Union”.

President Emmanuel Macron tweeted that France would be by von der Leyen's
side: “Today, Europe bears your face. The face of engagement, ambition and
progress.”

The president of the European Council of EU leaders, Donald Tusk, also congratulated her, declaring her, “a passionate fighter for Europe's unity.”

From the left, Spanish Prime Minister Pedro Sanchez also offered his congratulations, but said von der Leyen must push for “a more social, fair, sustainable and feminist Europe.”

Von der Leyen has had only a short time since the 28 EU leaders nominated her to win over the main centre-right EPP, socialist S&D and liberal Renew Europe blocs she hoped would get her the necessary 374 votes.

In the hours between her speech and the start of voting, party officials suggested she could count on the centre-right, almost all of the liberals and  maybe two-thirds of the left.

The election was by secret ballot, but the tight margin suggested that many MEPs from both her own conservatives and the rival socialist group abstained or opposed her.   

On the eve of the vote, the long-time ally of Merkel and member of her centre-right Christian Democrats (CDU) vowed that she was hoping “to serve Europe with all my strength”.

SEE ALSO: Germany's von der Leyen steps down as defence minister to run for EU's top job

Merkel praised von der Leyen as a “committed and convincing European”who would “tackle with great vigour the challenges facing us as the European Union”.

She would be “the fist female President of the European Commission and the first German in more than 50 years at the head of the European executive”, Merkel said in a statement.

“Even if I lose a long-standing minister today, I win a new partner in Brussels. I am therefore looking forward to good cooperation.”

German Foreign Minister Heiko Maas of the Social Democrats, reacting on Twitter, praised the fact von der Leyen had “promoted a united & strong EU, on which we now want to work together with her”.

“Time to look ahead, because the world is not waiting for Europe.”

Top-selling Bild daily's website cheered her appointment with the simple and enthusiastic headline “Ja! Ja! Ja! Ursula!”

The 'soloist'

Von der Leyen, a Brussels-born political blueblood and London School of Economics graduate, is the only minister to have served with Merkel since the beginning of her marathon reign in 2005 and previously ran the family affairs and labour ministries.

A life-long high achiever, von der Leyen has at times drawn envy and animosity for her best-in-class style, the persona of a super-mum with iron discipline and a perfect hairdo that some voters find unnerving.

She was once dubbed “the soloist” for her go-it-alone style, and a recent poll by Bild am Sonntag newspaper rated her as the second-least popular member of Merkel's cabinet.

A fluent English and French speaker, she has however built a solid network of allies across Europe, crucially including French President Emmanuel Macron, and launched a strong charm offensive in recent days.

Nonetheless, her success is far from assured given widespread anger that EU leaders, after days of backroom wrangling, chose von der Leyen rather than a European parliamentarian who had campaigned for votes.

Von der Leyen faces strong opposition from Social Democrats, Greens and other leftist politicians — especially SPD politicians from her own country.

In a hard-hitting paper handed out in Brussels, the SPD listed reasons they deemed von der Leyen “an inadequate and unsuitable candidate”, among them Germany's poor military preparedness and past accusations of plagiarism in her doctoral dissertation.

Others praise the candidate highly, including the SPD's former interior minister Otto Schily, who labelled her “a highly competent, intelligent, experienced politician who really has all the qualities that are critical for a commission president”.

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