New EU executive runs into trouble in parliament

By Barbara Lewis and Alastair Macdonald

BRUSSELS (Reuters) - The formation of a new European Union executive hit trouble on Wednesday as splits among EU lawmakers held up confirmation of British and Spanish nominees and threatened to disrupt approval for France's choice to run economic policy.

British Conservative Jonathan Hill, named to oversee the finance sector, was summoned back to a new grilling next week, and Greens and the left delayed Spaniard Miguel Arias Canete securing the energy and climate brief, prompting a threat from his centre-right allies to block approval for French Socialist Pierre Moscovici at an economics committee hearing on Thursday.

"Moscovici ... will have a very hard time," Peter Liese, a German centre-right lawmaker, told Reuters, fuming at the treatment of Arias Canete, whom opponents on the environment committee said should be ruled out of the role due to family ties to the oil business.

"From today, it's very clear we will be much tougher. We were so kind with the other political groups until now."

Claude Turmes, a Green from Luxembourg, spoke of a "dirty game behind the scenes" in which the right was blocking a committee vote that could kill off Arias Canete's candidacy and threatening to block the high-profile appointment of Moscovici.

Incoming European Commission President Jean-Claude Juncker had hoped broad understanding between his centre-right and the mainstream left could secure swift passage for a controversial line-up, more political than technocratic in Juncker's words, of a team he says can revive the economy and win back voters who returned a phalanx of anti-EU parties to the parliament in May.

But many lawmakers are also keen to demonstrate their independence from the Commission, and from the 28 governments of the Union, each of which nominates one member to the executive.

After the approval of the first 10 of the nominees in the first two days of hearings, angry scenes in parliamentary committee rooms on Wednesday night threatened to disrupt a timetable under which the new Commission is supposed to be approved en bloc on Oct. 22 and to take office on Nov. 1.

Any delay could draw into the dispute leaders of European governments and might, if prolonged, leave the outgoing team of Jose Manuel Barroso as a lame duck handling the confrontation with Russia over Ukraine, trade negotiations with Washington and rumbling divisions over austerity and deficits in the euro zone.

CONTROVERSIAL NOMINEES

Juncker, a long-time prime minister of Luxembourg and veteran EU dealmaker, has made a point of startling choices, naming figures to roles in which they or their governments have been at odds with Brussels. Some have described it as turning poachers into gamekeepers.

But the strategy could backfire if, for example, lawmakers will not believe a Briton can be trusted to run EU banking or a Frenchman can impose EU budget discipline on his Socialist party in Paris or a Hungarian right-winger can protect human rights.

Hill seemed to charm many of his interrogators with wit and warm words for European integration that set him apart from Eurosceptics in his party. But he failed to convince critics he was on top of a brief that would give a Briton a big say over the euro zone, to which London wants access for its financial services industry but refuses to join by using the EU currency.

"We are asking him to do a resit," said Sven Giegold of the Greens, saying Hill would likely be questioned again on Monday.

Kay Swinburne, a Conservative on the economic committee tweeted: "Additional exchange of views next week for Hill. Not easy to learn 5 years of financial regulation in 10 days."

Greens and the left, as well as some German conservatives wary of giving a euro "out" country such leverage on the common currency, saw a lack of substance in many of Hill's otherwise fluent answers. Some were especially concerned by his limited knowledge of proposals for Eurobonds - a sharing of public debt liabilities across the euro area - that is a hot-button issue in Germany but virtually unheard of in British politics.

"He could not explain his position on Eurobonds, which is rather embarrassing," Giegold told Reuters.

Hill assured them he was "not here as a representative of the City of London", promised to act in the common EU interest, praised his French predecessor and flattered the legislature.

He drew laughter and a ripple of applause when he rebuffed a questioner from the UK Independence Party, which wants to pull Britain out of the EU, by saying he did not think Queen Elizabeth would see any conflict between his oath of loyalty to her and his oath of office as a European Commissioner.

Seeking to appease Eurosceptics, British Prime Minister David Cameron has promised to renegotiate Britain's relationship with the EU and hold a referendum on membership in 2017 if he is re-elected next year.

Cameron said this week it would not break his heart if Britons voted to leave, although he believed it was in the UK's interest to stay in a reformed union. Hill sidestepped questions on whether he would be involved in negotiations Cameron wants to reform the EU. His "day job", he said, would be EU finance.

ENERGY QUESTIONS

Arias Canete, a former agriculture minister, ran into a barrage of criticism over past links with the oil industry and last-minute changes in his statement of financial interests.

He said he had sold his shares in two oil storage companies as soon as he was nominated as energy commissioner and his son had resigned from their boards. He repeatedly dodged questions about his brother-in-law's interest in energy firms.

Arias Canete also apologised for having made what he called an inappropriate sexist comment during this year's European Parliament election campaign. After a debate against a female candidate, he had said debating a woman was hard because a man who used his "intellectual superiority" might appear chauvinist.

He insisted there was no conflict of interest between his previous business interests and his portfolio. He was applauded by centre-right allies but criticised by several other groups, some of which also oppose Juncker's plan to merge the climate change and energy portfolios under a single commissioner.

In another hearing, Hungarian nominee Tibor Navracsics had to rebuff questions on his role in a Budapest government that has clashed with the EU over its treatment of minorities and laws that Brussels says restricted the media and free speech.

Seeking the education, culture and citizenship portfolio, he highlighted his role in negotiating Hungary's modification of new laws under EU pressure and his embrace, having grown up under communist dictatorship, of European values of democracy.

Asked sarcastically by an independent German lawmaker if he would make Hitler's "Mein Kampf" a set text in schools, he won applause by expressing support for Hungary's Jewish community.

It was not clear what the next steps on Arias Canete and Navracsics's candidacies would be. One EU official said Juncker did not expect more parliamentary decisions until Monday.

Moscovici, who was finance minister until earlier this year, is sure to face a torrid three hours before the economics committee, starting at 9 a.m. (8 a.m. BST). France announced on Wednesday it would need another two years until 2017 to get its deficit down to an EU limit of 3 percent of national output.

Germany's centre-right chancellor Angela Merkel is at odds with French President Francois Hollande over his proposal fiscal rigour be eased to reflate the economy. Berlin is pushing Paris to reform its finances and promote more competitive business.

(Writing by Alastair Macdonald; Editing by Howard Goller)