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EU moves to assuage Cameron after outvoting him on Juncker

By Luke Baker and Kylie MacLellan

BRUSSELS (Reuters) - European Union leaders nominated Jean-Claude Juncker for their bloc's most powerful job on Friday over the fierce objections of British Prime Minister David Cameron, who said the decision would make it harder for him to keep Britain in Europe.

Fellow leaders immediately sought to assuage Cameron - and an increasing eurosceptic British electorate - by promising to address London's concerns about the EU's future and to review the process for choosing future European Commission presidents.

Cameron forced an unprecedented vote at an EU summit to dramatize his opposition both to the way the former Luxembourg prime minister was chosen and to his suitability to head the EU's executive that proposes and enforces EU laws.

He was outvoted 26-2 on a show of hands in a solemn moment that highlighted Britain's isolation in the continental bloc of which it has been an uneasy, semi-detached member since 1973.

"The job has got harder of keeping Britain in a reformed EU," Cameron said after his defeat. "The job has got harder, the stakes are higher, the battle to reform this organization is going to be longer and tougher, no doubt about that."

In a Europe crying out for reform, leaders had gone for a "career Brussels insider", the career British politician said.

Juncker, 59, a veteran deal-broker at EU summits for more than two decades, will now go before the European Parliament for a confirmation vote on July 16, where he is likely to win a majority of center-right and center-left lawmakers.

EU leaders will hold another summit that day to decide on the other main EU jobs including a successor for European Council President Herman Van Rompuy, a new foreign policy chief and an economic policy czar.

Only Hungarian Prime Minister Viktor Orban joined Cameron in voting "no" to Juncker. Officials in the room said many leaders expressed sympathy for the British leader's position before the vote and there was no gloating after the show of hands.

Right after the vote, they agreed to add several points to their final statement saying Britain's concerns about the EU's future "will need to be addressed" and that the treaty principle of "ever closer union" - a bugbear to British Eurosceptics - allowed for different paths of integration for different countries.

Britain, for example, has kept out of the euro single currency project and the Schengen zone of passport-free travel.

They also promised to review the process for appointing future Commission chiefs once the new EU executive is in place - a nod to British objections to what Cameron called a power grab by the European Parliament.

German Chancellor Angela Merkel, keen to keep Britain in the EU, said: "I believe that the conclusions that we agreed showed we are ready to take British concerns seriously. The entire strategic agenda reflects Britain’s desire, which I share, for a modern, open, efficient European Union."

Britain has argued that Juncker is an old-fashioned federalist who lacks the will and the skills to reform the EU.

Other leaders spelled out why they think he is the right man for the job. Greek Prime Minister Antonis Samaras called him "a passionate European who can bridge differences... but also a realist."

The dispute was one of the most public and personal the European Union has experienced in a decade, damaging efforts to present a united front at a time when the bloc is recovering from an economic crisis and keen to bolster its global image.

Juncker was the leading candidate of the center-right European People's Party, which won the most votes in European Parliament elections last month.

UNITY OVERSHADOWED

The clash overshadowed a display of unity by the leaders on Thursday when they began the summit with a ceremony in the Belgian town of Ypres marking the centenary of World War One.

In another landmark event at the summit, the EU signed trade and cooperation agreements with Ukraine, Georgia and Moldova on Friday despite opposition from Russia, which had sought to tie the former Soviet republics to its own Eurasian economic union.

"Over the last months, Ukraine paid the highest possible price to make her European dreams come true," Ukrainian President Petro Poroshenko said at the signing ceremony in Brussels, calling it the most important day for his country since independence from the crumbling Soviet Union in 1991.

Moscow immediately threatened "grave consequences". A Kremlin adviser branded the Ukrainian leader a "Nazi".

Poroshenko agreed to extend a fragile ceasefire in eastern Ukraine for 72 hours to allow time for Russian-backed rebels in eastern Ukraine to lay down their arms and release prisoners.

Merkel, Cameron and French President Francois Hollande said the EU may step up sanctions against Moscow unless there is progress by next Monday.

The EU leaders also agreed under pressure from Italy and other Socialist-led countries to apply their budget deficit rules more flexibly to promote economic growth and employment.

EU officials insisted the association deals were not targeted against Russia, with which the bloc wants better relations. But Poroshenko, voicing the unease with which Moscow is viewed by many former satellites, urged the EU to help defend Ukraine's borders and give its 45 million people the prospect of full membership - something the EU has resisted.

Elected last month, Poroshenko noted wryly he was signing the pact with a pen stamped with the date of an EU meeting last November in Vilnius. It was his Kremlin-backed predecessor's 11th-hour refusal to sign the accord in Lithuania that sparked street protests which forced him to flee to Russia in February.

"Historic events are unavoidable," Poroshenko said with a grin and a flourish of the fateful pen.

"BREXIT" CLOSER?

Despite their conciliatory words, Friday's decision leaves Cameron in an uneasy position with fellow leaders, many of whom are now openly concerned about the possibility of Britain moving inexorably towards the exit.

"The Juncker episode is clearly a substantial defeat for David Cameron, and without remedy, increases the risk of Brexit. However, it is far from the end of the story for sweeping European reform," said Mats Persson, director of the London-based think-tank Open Europe.Northern European friends of Britain sought to play down the rift and stressed they would work to keep the UK in the union.

British officials concede that Juncker may make it harder to get a renegotiation of membership terms and his presence may also increase the likelihood that Britons vote to leave the EU.

British media have vilified Juncker, with one newspaper saying his family had Nazi ties because his father was forced to serve in the German army after it occupied Luxembourg, while another focused on his drinking.

His successor as chairman of euro zone finance ministers, Dutchman Jeroen Dijsselbloem, said Juncker smoked and drank heavily in meetings. Juncker has denied any alcohol problem.

(Additional reporting by Kylie Maclellan and Julia Fioretti; Writing by Luke Baker and Paul Taylor; Editing by Alastair Macdonald)

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