Cameron's 'Stop Juncker' drive seen as lose-lose strategy

By Andrew Osborn LONDON (Reuters) - Like a poker player, Prime Minister David Cameron prefers to hold his cards tight to his chest when it comes to clawing back powers from the European Union, lest he blow his bargaining position, aides are fond of saying. Yet he has thrown caution to the wind in dramatising his implacable opposition to Jean-Claude Juncker, the former prime minister of Luxembourg, becoming the next president of the European Commission, the EU's most powerful job. Cameron has gone as far as to suggest that Britain will drift closer to the EU exit if he doesn't get his way, a warning that angered German Chancellor Angela Merkel. A number of European leaders privately share Cameron's reservations about appointing Juncker, 59, a veteran deal-maker who has worked for closer EU integration for the last 25 years. But his all-out, public drive to take down the Luxembourger has embarrassed potential allies and hardened adversaries. For some EU insiders, it shows the British leader doesn't understand how the EU works. "He has painted himself into a really difficult corner," Rem Korteweg, a senior research fellow at the Centre for European Reform in London, a think tank, told Reuters. "Putting the nuclear option of Brexit (a British EU exit) on the table immediately and not using it as an option of last resort didn't do him any good. It's a technical mistake to be forceful from the get-go." The European policy adviser of one EU prime minister criticised the British leader's lack of patient coalition-building and guile. "Everyone knows that European affairs is a consensual game. You don't win by going nuclear," the adviser said, speaking on condition of anonymity. "I've wondered whether Cameron needs a Europe adviser." Cameron's objections to Juncker are profound. The British leader has promised to try to reshape Britain's EU ties if re-elected next year before giving Britons an in/out EU membership referendum in 2017. That makes it vital, say aides, that the next president of the EU executive, the body that proposes and enforces EU rules, should be someone willing to impel reforms that would return some powers to member states while focusing on free trade and market liberalisation. Cameron sees Juncker as far too federalist and wedded to the idea of "ever closer union", a concept the British leader would like to erase from the 28-nation bloc's founding treaties. Instead, he is thought to favour Danish Prime Minister Helle Thorning-Schmidt, a reformist Social Democrat from a country that like Britain has stayed outside the euro zone. 'NO CLEAR WINS' His campaign against Juncker is freighted with risk. If he succeeds in thwarting Juncker, he may be feted at home by the Eurosceptic press and his divided Conservative party. But such a victory would be pyrrhic. Europe-watchers believe he would have used up his political capital with fellow leaders, damaged Britain's chances of a good Commission job, and above all antagonised Germany's Merkel, Juncker's most important backer and the person Cameron needs most to enable EU reform. He would also have set the European Parliament, which backs Juncker, on a collision course with EU leaders and with whomever they nominated instead of him. If he fails to stop Juncker, the outlook for Cameron is even worse. It would be interpreted as a sign of embarrassing weakness at home and abroad. Political foes would be likely to say it showed his chances of overhauling the bloc were nil, and he would have made an enemy of the new Commission chief. "It's damned difficult for him. There are no clear wins," said Mats Persson, director of the Open Europe think-tank in London. "If he does lose, he will have spent a lot of political capital and will look domestically like a person not in control. The charge will be: 'You said you can reform the EU and negotiate but you can't even stop a federalist who has been appointed by the European Parliament'," Persson said. Juncker, who has made clear he feels personally bruised by Cameron's campaign against him, would hardly be sympathetic to the British leader's plans to reduce the Commission's powers and return control over some policy areas to national authorities. Cameron is in a tight spot over Europe at home, a familiar position for leaders of his often fractious party, which like the U.S. Republicans is wedded to national sovereignty. He faces an electoral challenge from the anti-EU UK Independence Party (UKIP), which won the European Parliament election in Britain last month, pushing Cameron's Conservatives into third place. Cameron's advisers fear UKIP could now split the right-wing vote in a tight national election next May, making it harder for the Conservative leader to get re-elected. A restless minority among his own members of parliament are also making life difficult for him. Worried they will lose their seats and deeply Eurosceptic, they want him to show voters he is determined to claw back powers from Brussels and take on a Union many Britons feel has become far too powerful. The rebels say they have grown tired of Cameron's vague Eurosceptic rhetoric and want to see action. "If he wasn’t to succeed, then we’re going to have a federalist, and it would seem to me impossible under the circumstances to have a renegotiation that would satisfy him or the British people," said Peter Bone, a Eurosceptic Conservative lawmaker. "It's a litmus test. If Juncker becomes Commission president it's a huge setback for the prime minister in the renegotiation. In the end, I think he will conclude that you can't deal with federalists and that he should lead the 'Out' camp." Voters are breathing down Cameron's neck too. Though most opinion polls show Britons would vote narrowly to stay in the EU if a referendum were held today, immigration tops their concerns along with the economy for the first time in years. UKIP has managed to link immigration to EU membership in many voters' minds by highlighting how the bloc's freedom of movement rules means Britain is powerless to stop migrants from poorer EU countries. That in turn has stoked Euroscepticism. AGGRESSIVE CAMPAIGN Cameron has run an aggressive campaign against Juncker. He began his offensive before a May summit in Brussels, telephoning fellow leaders to urge them not to be "railroaded" into choosing the European Parliament's preferred candidate. The assembly, which will vote on the EU leaders' nominee, backs Juncker on the basis of last month's European elections. The European People's Party emerged as the largest political group in parliament and supports the Luxembourger. German media reported that Cameron had threatened at the summit to bring forward a referendum on British membership if Juncker got the job and had said he wouldn't be able to ensure his country stayed in the EU. A British official denied the early referendum threat but Cameron himself said the choice of a Commission chief less open to reforms sought by London would be "unhelpful". Cameron then took his campaign to a mini-summit in Sweden, lobbying the leaders of Germany, Sweden and the Netherlands. However, he failed to win over Merkel who is under pressure from German media and politicians to stick with Juncker. In a rebuke to Cameron, she reaffirmed her backing for Juncker and said making threats was contrary to the European spirit. Undeterred, the British leader then penned an article for European newspapers saying Juncker "did not stand anywhere and was not elected by anyone". Britain's traditionally Eurosceptic press has swung behind Cameron, building the issue up into a test of strength recalling former prime minister Margaret Thatcher's battles over EU cash. The mass-market Sun tabloid labelled the Luxembourger "the most dangerous man in Europe," and articles about him have been peppered with unflattering references to drinking and smoking. The Sun also said Juncker's family had "Nazi links" because his father was forced to serve in the German army after Luxembourg was occupied in World War Two. Cameron's Europe strategy suffered a new blow last week when his political group in the European Parliament voted to accept Germany's anti-euro AfD party, Merkel's political foes, into its fold against the British leader's wishes. For some, Cameron's blunt anti-Juncker tactics are part of a wider pattern of subjugating the British relationship with the EU to his domestic imperatives. He ruffled Merkel's feathers in 2009 by pulling the Conservatives out of the European People's Party in the European Parliament. That helped him win the party's leadership but diminished its influence over EU legislation. He then angered many in 2011 by vetoing EU treaty change aimed at tackling the euro zone debt crisis at its height. Other EU leaders ignored Cameron, putting the new rules into a separate treaty outside the EU framework. Open Europe's Persson said Cameron had little choice but to oppose Juncker, given his domestic political predicament. "He didn't have the option not to gamble. There was no safe option," said Persson. Win or lose, Cameron's "Stop Juncker" campaign is starting to look like a busted flush. (Additional reporting by Luke Baker in Brussels; Editing by Paul Taylor)