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Resignations Hit European Union at a Difficult Time

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TIMES STAFF WRITER

The European Union, the world’s biggest trade bloc and No. 1 U.S. commercial partner, has been propelled into chaos at a crucial juncture by the mass resignation of its executive, besmirched by charges of cronyism, mismanagement and fraud.

The action early Tuesday by the 20-member European Commission, the equivalent of the U.S. Cabinet, followed a scathing report from a blue-ribbon panel. It concluded that “it is becoming difficult to find anyone who has even the slightest sense of responsibility” at the Brussels-based commission.

Nominally in charge of an $80-billion annual budget and a small army of 17,000 bureaucrats and employees, the commissioners “have lost control over the administration they are supposed to manage,” the panel said in its 148-page report.

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Led by Jacques Santer of Luxembourg, their courtly if uncharismatic president, commission members tendered their resignations when it became obvious that the alternative was facing a motion of censure backed by the largest voting bloc in the European Parliament, the Socialists.

Many observers called the mass resignation the gravest institutional crisis in the 42 years since the EU’s predecessor, the Common Market, was founded. Never before had a European commissioner been forced to leave office before the end of his or her five-year term.

The euro, the 2 1/2-month-old common currency that is the capstone of the EU’s long effort to bring about greater political and economic integration of Europe, dropped in value in early trading Tuesday, but then rallied. Some EU governments expressed concerns over how well affairs can be conducted in the coming sensitive months.

But for some, the crisis was a welcome precedent--the first time the popularly elected European Parliament managed to impose its will on the bureaucrats and politicians who are appointed by EU member states to seats on the commission.

The resignation under parliamentary pressure, said former Portuguese President Mario Soares, “reaffirms the importance of the European Parliament and shows we are able to get beyond the democratic deficit that existed in the directing organs of the European Union.”

Olivier Duhamel, a Paris law professor and French Socialist in the Strasbourg, France-based Parliament, said the EU had lived through a “historic day” comparable to the victories of the House of Commons centuries ago in asserting the popular will over the kings of England.

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The upheaval at EU headquarters, though, could hardly have come at a less convenient time for Europe.

The Europeans are engaged in a trade dispute with the United States over bananas as well as disagreements over hormone-fed beef, genetically modified crops and noise from aging U.S. aircraft.

Besides not having settled questions about the future value and world role of the euro, the governments of the EU’s 15 member states also haven’t been able to come to genuine agreement on reforming finances or the subsidy system for European farmers that currently eats up half of the community’s budget.

The bedrock on which the European Union rests, Franco-German relations, has been shaken by demands from German Chancellor Gerhard Schroeder that the net German payment to the EU of $11 billion be reduced.

In this year that marks the 10th anniversary of the razing of the Berlin Wall, the EU is also engaged in widespread, protracted negotiations to enlarge eastward by admitting former Soviet satellites. NATO, another Brussels-based international organization, did that last week.

The EU heads of state and government now have the commission crisis to worry about as well when they meet March 24 and 25 in Berlin.

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Schroeder, official host of the Berlin summit, was in the Netherlands when the commission resigned. He initially appeared shaken, but later argued that the commissioners’ departure should be welcomed as a chance for “healing reforms.”

“I would not go so far as to say this is a crisis,” Schroeder said.

After moving on to Brussels for talks with Santer, the German leader told a news conference that he remained confident that the Agenda 2000 blueprint for EU financial reform will still win consensus at the Berlin summit, even with only eight days left.

According to John Palmer, director of the European Policy Center, a Brussels think tank, it will now essentially be up to the German government, which holds the EU’s revolving six-month presidency, to decide whether to recommend asking Santer and the others to remain in office as caretakers until the end of the year, when their normal terms expire, or to advocate choosing new interim commissioners.

A new commission president, in any event, was supposed to be chosen in June and installed in office with a new slate of commissioners Jan. 1.

Spain was one EU member to come out almost immediately in favor of keeping the outgoing officials until the end of the year. But the president of the European Parliament, a Spaniard, called that impossible.

“The commissioners have handed in their resignation, it’s not to stay another nine months,” Jose Maria Gil-Robles told a news conference.

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In January, the European Commission came under intense rhetorical fire in the 626-member Parliament, which has fewer powers than a genuine legislature, for alleged corruption and mismanagement. A censure motion failed, but the Parliament did agree to create the five-member blue-ribbon panel.

Commissioner Edith Cresson, a former French prime minister, came in for especially severe criticism for having appointed her personal dentist, Rene Berthelot, to a phony EU job. The panel also said Cresson, who was in charge of research, education, youth and training, had kept mum though she knew of widespread irregularities in a $652-million education project she was responsible for.

Another commissioner, Joao de Deus Pinheiro of Portugal, was found to have recruited his brother-in-law for a commission job. Monika Wulf-Mathies, a German commissioner, wangled a job for a friend, the report said.

The investigating panel said it found no instance of commissioners having derived inappropriate personal gain for themselves, but said they bore responsibility for the many instances of fraud and mismanagement unearthed.

Times staff writer Carol J. Williams in Berlin contributed to this report.

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