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Rebuffing Cameron, Merkel sticks to Juncker for top EU job

By Kylie MacLellan and Simon Johnson

HARPSUND Sweden (Reuters) - German Chancellor Angela Merkel reaffirmed her support on Tuesday for Jean-Claude Juncker becoming the next president of the European Commission after meeting EU leaders critical of the Luxembourger.

Merkel made her statement after talks in Sweden hosted by Prime Minister Fredrik Reinfeldt and also attended by British Prime Minister David Cameron and Dutch premier Mark Rutte.

The informal meeting was held amid a campaign by Cameron, who has promised a referendum on Britain's continued membership of the European Union, to prevent the federalist former Luxembourg prime minister being nominated to head the bloc's executive arm.

"I have said that for me Jean-Claude Juncker is the candidate for the office of Commission president and that I want to have him as the Commission president," Merkel told a news conference under an unusually hot Swedish sun at the government's country mansion of Harpsund.

Who becomes the next Commission head has generated heated debate since May's EU parliamentary elections, with the risk Britain could be pushed closer to leaving the EU if its opposition to Juncker is not heeded.

The four leaders talked until around 1 a.m. on Tuesday over coffee in Harpsund's piano room, with Merkel's position unchanged in private, a source at Cameron's office said. Cameron had hoped the meeting could give more impetus to an alliance to block Juncker but the source said discussions were "constructive but not resolved".

Britain regards Juncker as an old-style European federalist and says someone more open to reforming the EU and reducing the powers of Brussels should be picked, reflecting a widespread protest vote against the bloc last month.

With Cameron promising Britons an in-out EU membership referendum in 2017 if re-elected next year, Juncker's appointment may see a political backlash in the UK.

"Obviously the approach that the European Union takes between now and then will be very important," Cameron said, saying Europe had to be more open and needed leaders "capable of taking the European Union forward in that direction." "Obviously if the European Union doesn't go in that direction that would be unhelpful," he said.

"NO THREATS"

One of the British leader's problems is that he cannot afford to alienate Merkel if he is to succeed in renegotiating his country's relationship with Europe prior to holding a referendum.

Merkel, criticized by German media for her initial reticence in giving Juncker full-hearted support, has indicated she does not want to isolate Britain and would prefer a broad consensus if possible.

But asked about how the debate should be conducted, she said: "Threats are not a part of it. It's not part of the way we act."

Reinfeldt and Rutte took no clear public position for or against Juncker, saying that the policy agenda - like reforms to the EU budget and labor markets - for the next Commission had to be agreed first.

"We have agreed that the future policy priorities of the EU must be decided before we can decide on appointments of different top jobs," Reinfeldt said.

But Reinfeldt has made it clear that he has concerns with Junker's appointment.

"We don't think that you should choose party candidates a long way in advance. That disqualifies a large number of people from being candidates for these top jobs," Reinfeldt told Reuters after the meeting.

Juncker has the support of the European People's Party, the largest center-right political grouping in the European Parliament, which named him as its candidate before last month's European elections.

He may be the front runner for the job, but other possible candidates have also been suggested.

While IMF head Christine Lagarde has ruled herself out of the running for the job of European Commission president, British officials have made clear center-left Danish Prime Minister Helle Thorning-Schmidt would also be acceptable.

Other names include outgoing Finnish Prime Minister Jyrki Katainen while Irish Prime Minister Enda Kenny is another potential compromise.

Cameron has said EU leaders and not the European Parliament should nominate the candidate for Commission president, arguably the most powerful job in the bloc's institutions with major influence over policy affecting 500 million Europeans.

Leaders of the EU legislature have argued that the assembly should play a defining role in choosing the next Commission president, citing the bloc's governing Lisbon treaty which says the nominee should be chosen taking the elections into account.

EU leaders have mandated European Council President Herman Van Rompuy to propose a package of appointments for several top EU jobs, including the Commission presidency, if possible in time for a summit at the end of this month.

Under the Lisbon treaty, the decision is subject to qualified majority rule. Cameron appears to be short of a blocking minority unless Italian Prime Minister Matteo Renzi, who has said Juncker has no automatic right to the job, is willing to block the veteran Luxembourger.

(Additional reporting by Annika Breidhardt in Berlin. Writing by Alistair Scrutton. Editing by Niklas Pollard and Paul Taylor)

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