Lonely Cameron fails to stop EU nominating Juncker

BRUSSELS (Reuters) - European Union leaders nominated Jean-Claude Juncker for European Commission president on Friday by an overwhelming majority over the fierce objections of British Prime Minister David Cameron, who called it "a sad day for Europe".

Cameron forced an unprecedented vote at an EU summit to dramatise his opposition both to the way the former Luxembourg prime minister was chosen and to his suitability for the most powerful EU job. He warned it could influence British voters' eventual decision on whether to leave the European Union.

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 centre-right and centre-left lawmakers.

European Council President Herman Van Rompuy confirmed in a tweet that the leaders had designated Juncker but gave no details of the procedure.

A British official said all leaders had given their views and the vote was 26-2 for Juncker, with only Hungarian Prime Minister Viktor Orban joining Cameron in voting "no".

"I've told EU leaders they could live to regret the new process for choosing the Commission president," Cameron tweeted from inside the meeting. "I'll always stand up for UK interests."

The British leader has said the nomination was the result of a power grab by the European Parliament and that Juncker, seen by London as an old-fashioned federalist bent on taking power from nation states, lacked the will and the skills to reform the EU, warning of unspecified 'consequences'.

Cameron, who is under pressure from a surge in anti-Europe sentiment at home, stopped short of threatening to campaign for a "No" vote in a referendum on EU membership that he has promised to hold in 2017 if he is re-elected next year.

But a British official said he reminded leaders that support for staying in the EU was "wafer thin" despite a recent uptick in numbers who say they want the country to remain.

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 centre-right European People's Party, which won the most votes in European Parliament elections last month.

The Dutch and Swedish leaders, who agreed with Britain's concerns on the process, backed Juncker in the end, as did the bloc's most powerful figure, centre-right German Chancellor Angela Merkel.

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 pro-Russian rebels to lay down their arms and release prisoners. The EU said it could step up sanctions against Russia unless there was progress by 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.

"HUGE DISQUIET"

On the summit's central issue, the debate between Cameron and his peers on Juncker resembled a dialogue of the deaf.

Britain contends the European Parliament effectively imposed its preference on EU leaders, skewing the institutional balance in the bloc away from national governments and setting a dangerous precedent.

Referring to last month's election to the EU legislature, in which Cameron's Conservatives were beaten into third place by the UK Independence Party which advocates leaving the bloc, the prim minister said: "The European elections showed that there's huge disquiet with the way the European Union works and yet the response I believe is going to be wrong on two grounds.

"One on the grounds of principle - it is not right for the elected heads of government of the European countries to give up their right to nominate he head of the European Commission, the important role in Europe. That is a bad principle. And it's the wrong person. Jean-Claude Juncker has been at the heart of the project and increased the power of Brussels and reduced the power of nation states his entire working life."

EXIT RISKS

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.

Northern European friends sought to play down the rift and stressed they would work to keep Britain in the union.

Swedish Prime Minister Fredrik Reinfeldt, who initially backed Cameron, said he thought they had established the principle that the Parliament's so-called "Spitzenkandidaten" system would not pre-empt national leaders' right to choose the Commission president in future. He said he would back Juncker.

"We need the UK in the European Union," Danish Prime Minister Helle Thorning-Schmidt, who is married to a Briton, told reporters, saying she hoped the confrontation over Juncker would not do lasting damage.

New Finnish Prime Minister Alexander Stubb, who has a British wife, said: "I do not think that the UK is any closer to leaving and I think it's very important that they stay in the European 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 personally, 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, Jeroen Dijsselbloem of the Netherlands, 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)