6 things you should know about von der Leyen’s SME envoy scandal

The appointment of Germany’s Markus Pieper as SME Envoy at the European Commission is making waves, drawing protest from MEPs, transparency groups – and even senior officials within the Commission itself.

The Commission’s spokesperson has argued the recruitment was fully in line with normal procedures, and Pieper is set to start his duties on 16 April.

But Commission President Ursula von der Leyen has also been accused of a lack of transparency when hiring someone from her own German political party, the Christian Democrat Union, to a lucrative official post.

Here are six things to know about the scandal that’s consuming the Brussels bubble in the run-up to June elections.

1. Why did Markus Pieper’s appointment generate such controversy?

Pieper’s appointment as EU Envoy for Small and Medium-Sized Enterprises (SME) has been opposed by lawmakers and activists, who’ve raised concerns over political favouritism in public appointments.

MEPs from multiple parties have tabled an amendment for consideration today (10 April) on the Commission’s budget, saying the Pieper decision should be rescinded as it wasn’t based on merit.

Perhaps more unusually, a grouping of von der Leyen’s own senior Commissioners – including Thierry Breton, the Frenchman responsible for SMEs – have also written to demand a rethink.

The decision to press ahead and sign a contract with Pieper shows a “brazen disregard for legitimate and serious concerns” over an “appointment that smacks of cronyism”, Nick Aiossa, Director of Transparency International EU, told Euronews.

2. How much will the EU’s SME Envoy earn?

Pieper will be recruited at AD15 grade – the second most senior and highly paid level of EU officials, equivalent to a post of Deputy Director General.

While his exact take-home salary isn’t known, the basic salary for the grade advertised could reach €19,534 per month – a significant rise from his current headline pay as an MEP, a position he’s held since 2004.

EU officials don’t pay national income tax, but face a special progressive EU deduction ranging from 8% to 45%. Temporary agents like Pieper can also benefit from EU pensions, health insurance, and from extra allowances worth as much as 16% of salary for moving to Belgium.

Even after leaving office, he could still draw up EU unemployment benefits worth up to 60% of his salary, for up to three years.

A Commission spokesperson told Euronews he couldn’t comment on the exact pay deal, which can also depend on family circumstances, citing privacy reasons.

3. What will Markus Pieper’s duties involve?

Von der Leyen announced plans to appoint an EU Envoy for Small and Medium-Sized Enterprises (SMEs) in September 2023, saying that lengthy administrative processes could hold back company growth.

According to the job advert, the successful candidate needs accomplished interpersonal skills, a strong reputation among SMEs, and 15 years of professional experience.

Supported by officials from the Commission’s industry department, DG GROW, he’ll have to submit a yearly report to the Commission’s highest-decision making body on cutting red tape, and will also update MEPs and national ministers annually on his work coordinating national SME Envoys.

He’ll filter new EU legislation to check the impact on SMEs, and attend conferences where he encourages people to “Think Small First” when devising and implementing new laws, the job description said. His appointment is due to last four years with the possibility to extend by a further two.

A Commission spokesperson did not immediately respond for comment on what transparency would be provided regarding his work, such as whether he’ll publish details of meetings with lobbyists.

4. Where will the EU’s SME envoy work?

According to the job description, Pieper will be supported by staff at DG GROW – the department of the Commission responsible for industry and entrepreneurship.

DG GROW already has around 660 staff, according to Commission figures. It already employs an SME Coordinator in the form of Deputy General Hubert Gambs, and multiple teams dedicated to innovation, entrepreneurship and SMEs.

Pieper will report both to von der Leyen and to EU single market commissioner Thierry Breton – which might be awkward given that Breton clearly has reservations about whether Pieper was the right person for the job.

On 9 April, Commission spokesperson Eric Mamer told reporters that for all EU executive staff it is “part of their responsibilities that they must have to work with their responsible Commissioner,” and that he was “absolutely convinced that effective working methods will be put in place” with Breton.

5. How was Markus Pieper selected as EU SME Envoy?

The job advert last September attracted several dozen applications, and a pre-selection panel then prepared a shortlist of suitable names.

Candidates were interviewed by a range of senior officials, including von der Leyen’s chief of Staff Bjoern Seibert, who has himself since controversially moved to become head of her EPP campaign team.

The final decision was taken by the College on the basis of a proposal from EU Human Resources Commissioner Johannes Hahn, who’s also in the EPP, but doesn’t seem to have been supported by lead Commissioner Breton.

The decision was put on the agenda for a meeting on 31 January, at which Breton was set to be absent on official business, as was fellow sceptic Josep Borrell.

While it doesn’t comment on individual procedures, a Commission spokesperson has said the recruitment was “conducted in full compliance with the Commission’s procedures for the selection and appointment of senior officials,” and that performance in early stages of the recruitment aren’t a criterion for recruitment, but a mere gateway to further interviews.

However, in two internal letters seen by Euronews, Breton, Borrell and two others raised concerns over the process, and called for a wider debate on how senior officials are nominated.

6. Will Markus Pieper’s appointment affect the EU elections?

The controversy comes as Ursula von der Leyen seeks a mandate for a second five-year term as Commission president, and as Europeans prepare to go the polls in June to elect over 700 MEPs.

According to an exclusive poll carried out by Ipsos for Euronews, the European People’s Party – to which both von der Leyen and Pieper both belong – is set to come out on top, but won’t have a majority on its own.

As such, to be confirmed as President, von der Leyen will likely need support from MEPs from other parties, such as the Greens, Socialists and Democrats, or Liberal Renew grouping.

Some of those MEPs are now actively calling for von der Leyen to rescind the Pieper appointment in an amendment set to be put to the vote on Thursday.

She will also need to be proposed by the European Council, whose members include German socialist Olaf Scholz and French President Emmanuel Macron, from Renew.