EU Approves New Commission

Mr. Barroso's second term promises to be far different than the previous five years. Those years were spent crafting complex regulation on chemicals, carbon emissions and mobile-phone rates, admitting Romania and Bulgaria to the EU and waging minor battles with member states over their government spending and debt levels.

Now the challenge is more daunting and serious: how to climb out of the worst economic crisis in the EU's history. Government budgets are bleeding red across the EU, especially in the 16-nation euro zone. Greece is on the verge of needing a massive bailout. Spain, Portugal, Italy, the U.K. and others face massive deficits. Total investments in the EU are down around 10% from year-earlier levels, and gross domestic product volume was down 4.1% in the third quarter of 2009 from the year-earlier period. EU unemployment is at 10%.

The commission is staffed by talented economists and thinkers who draft papers laying out proposals for Europe to create more-innovative, environmentally friendly industries, shore up public finances, boost research investment and deal with the pension liabilities of an aging population.

The challenge, say officials and analysts, will be overcoming political unwillingness in EU countries. Mr. Barroso "will need to provide a coherent approach to things," says Janis Emmanouilidis, an analyst at the Brussels-based European Policy Centre. Offering a forceful response to globalization "is the only way" for the EU "to avoid gradual marginalization," he says.

Mr. Barroso told the European Parliament Tuesday that "stronger economic coordination is the only way forward" to overcome the financial crisis. He promised to "build a competitive and sustainable economy, tackle climate change and modernize the EU's industrial base."