Populist or socialist – which jibe hurts Barroso more?

The European Commission was accused of "socialism" last week by the head of mobile phone company Vodafone's German business, Friedrich Joussen, for using retail price regulation as part of its bid to bring down roaming charges. But while that comment can be seen as a predictable reaction from mobile phone executives fearful of losing their revenue from roaming fees, there is another accusation which could stick more readily: economic populism.

At a recent conference in Brussels on the priorities of the Finnish presidency, another Vodafone executive, Claire Thwaites, appealed to the Finns not to pursue "populist policies" during their six-month term of office.

A consultant specialising in EU affairs recently characterised the Commission's economic strategy as targeting any sectors which were responsible for landing

consumers with large bills as a way of winning over sceptical citizens so that, one day, they might say 'Yes' to an EU constitution.

In addition to its recent action on mobile phone roaming fees, the Commission has launched sectoral inquiries into energy companies and payment card firms to identify barriers to effective competition. It sent credit card giant MasterCard a formal statement of objections, setting out its concerns about how the company might be deterring its rivals from competing in the payments market. A bid to ensure full transparency on flight prices could also be seen as another measure motivated by a desire to be consumer-friendly.

When Commission President José Manuel Barroso first took office in 2004 his initial priorities were revitalising the Lisbon Agenda to boost economic growth and job creation as well as focusing on better regulation. This meant applying the lightest possible regulatory touch, only proposing new legislation where it was absolutely necessary, carrying out impact assessments and scrapping outdated or redundant laws.

But it became clear to Barroso that the success of the Lisbon Agenda depended on member states honouring their commitments to economic and social reform - something they would do only according to their own domestic political agendas. Similarly, the inherently technocratic and business-focused better regulation agenda was never going to generate wild public enthusiasm.

As a response, the president and his team developed the 'twin-track' approach. As the 'citizen's agenda for Europe' adopted on 10 May explains, it means concentrating on areas of business of direct benefit to citizens to contribute to better perceptions of the EU and create more public support for a new round of treaty change in a few years' time.

The paper highlighted efforts to lower roaming charges and to remove remaining barriers to effective competition in the single market, especially in the energy and banking sector, as key elements of this approach.

Does the accusation of economic populism, ie taking too heavy-handed an approach to market regulation to win public support for a new constitution, bear up?

On the roaming issue, the Commission's decision to recommend a cap on retail prices seems at odds with its general attitude of a light regulatory touch. Several commissioners with free-market credentials such as Günter Verheugen, Peter Mandelson and Charlie McCreevy opposed the move, although the final decision was endorsed by all Commissioners after mobile phone operators were given six months' grace to cut roaming fees before the cap would kick in.

An aide close to Barroso stressed that there were "exceptional circumstances" in the cases of roaming. Operators had been given five years to reduce charges but nothing had happened.

The official also rejected suggestions that Barroso's team's priorities were being determined by the public relations impact of targeting key sectors such as utilities and payment cards. He stressed that the Commission was simply applying existing internal market and competition legislation. "Welcome to the rule of law," he said.

The sectoral inquiry into the energy market is driven more by the concerns of large industrial energy users than households. The recent European Court of Justice ruling annulling the Commission's decision to approve the merger between music giants Sony and BMG also shows that the Commission has to make sure its decisions are absolutely legally watertight and not influenced by short-term political considerations.

Daniel Gros, director of the Centre for European Policy Studies, puts the populism jibes into perspective. "If I compare the Commission to national governments [in terms of populism], it's about ten to one in favour of national governments, especially large member states," he says.

The European Commission was accused of "socialism" last week by the head of mobile phone company Vodafone's German business, Friedrich Joussen, for using retail price regulation as part of its bid to bring down roaming charges. But while that comment can be seen as a predictable reaction from mobile phone executives fearful of losing their revenue from roaming fees, there is another accusation which could stick more readily: economic populism.

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