Chaos reigned in Portugal through the summer of 1975, when Jose Manuel Duro Barroso was 19 years old. An oppressive dictatorship had been overthrown the previous year, and now Soviet-backed communists were trying to control the country. Barroso belonged to a Maoist group that had resisted the fascist regime, and he continued to fight what he saw as a new dictatorship of the left. A student leader in the University of Lisbon's law school, he knew there was a warrant for his arrest, so for most of 1975 he never slept in the same house two nights in a row. Yet one day communist students recognized Barroso distributing pamphlets on the street, and called the military police. When soldiers arrived they tossed him in a jeep and drove off. Suddenly he turned to his captors. "I don't think you have the courage to shoot a man in the back," he taunted, and jumped out the door. They didn't shoot.

It was daring, to be sure. But this long-haired radical wasn't taking any chances. He first provoked the soldiers to make sure they were not trigger-happy. Moreover, the jeep was slowly chugging up a steep hill. "I am not completely a fool," laughs Barroso, 48, in the Lisbon office of the European Commission. Barroso has long since left Mao behind to embrace free markets, but it is that balance between conviction and pragmatism that has powered the former rebel's career as scholar, diplomat and politician. Above all, Barroso is not a man who is easily intimidated. That quality in particular may prove to be indispensable as he takes on the job of president of the European Commission on Nov. 1.

Next week he could face a showdown over Rocco Buttiglione, the Italian nominee for Justice commissioner, who provoked a fury for saying homosexuality is a "sin" and women belong in the home. This is a critical test for a leader who has staked his presidency on making Europe's economy more competitive, and casts himself as an "honest broker" among warring factions. Parliament cannot reject individual nominees, but could vote down the entire Commission. "He is looking for ways and means to accommodate Parliament's concerns," said a source close to Barroso over the weekend, which could include realigning portions of the Justice portfolio without changing commissioners. On Thursday he will meet with party leaders, and he will address the entire Parliament on Oct. 26, the day before the vote. "The president is quite confident they will be able to reach a compromise."

This is sure to be only the first of many challenges for Barroso. The new European constitution will soon face a contentious referendum in many countries, even as the polls show extraordinary ignorance about the EU. The balance of power in an enlarged Union is about to shift in ways as yet unknown. With the presidency comes formidable official powers, from introducing legislation to safeguarding treaties. In the right hands, there is intangible power as well. And as prime minister of Portugal, Barroso established himself as a uniquely hard-nosed European reformer by bringing a runaway budget under control in a political war that left him with many enemies at home. Whether his gifts are adequate to the task of reforming Europe, though, remains to be seen.

Barroso has staked his presidency on the thorniest problem: transforming the European economy. The Lisbon Agenda, born in March 2000 when Europe was almost desperate to catch the American free-market juggernaut, famously aims to make Europe the world's most competitive economy by 2010. Less famously, it gives equal priority to defending Europe's commitment to the environment and social welfare. Not surprisingly, the plan soon suffered from what Barroso calls the "rhetoric-delivery gap." Growth still languishes, welfare states still thrive. Barroso says every Commission proposal, welfare included, must now pass a "competitiveness test."

The timing is ripe. Cost pressures from China and India have grown acute. Center-right parties are heavily represented in the European Parliament, the Commission and among the heads of government. Arguably, there is a silent majority for reform. "It feels like it is now or never," say Karin Riis-Jorgensen, a Danish M.E.P. who is forming a multiparty reform lobby in Parliament.

Barroso agrees. He says he assigned commissioners based not on their ideology, but on their ability to get reforms done. The 24 nominees include six centrists like Barroso, while the rest are divided among socialists, liberals and Greens. Barroso chose a socialist, Vladimir Spidla of the Czech Republic, for Employment, and a businesswoman, Neelie Kroes of the Netherlands, for Competition. He personally chairs the Lisbon Committee, and created a vice presidency, really a public-relations portfolio, for Margot Wallstrom, an articulate Swede, to get citizens to pay attention. "I am a reformer," Barroso says. "The old cleavages of left and right don't always apply in modern politics."

Barroso is, by that definition, a modern politician. He is an Atlanticist who spent several years in academia advocating European integration. He's also a budget cutter who rejects any suggestion of copying the American economic model wholesale. He cites an essay by Polish philosopher Leszek Kolakowski on "How to Be a Conservative-Liberal-Socialist." "I could sign that text," he says. In his first exclusive interview since his nomination, Barroso said he cannot detail specific reform plans until he completes a tour of every EU capital to discuss his goals, and his Commission is approved. But he will build on a review of the Lisbon process to be published in November, and by January he will present a plan to Parliament.

Many point to Frenchman Jacques Delors as a model for Barroso. As president from 1985 to 1995, Delors fought to create the single market and to set the euro on track. But that was then. Delors was strongly backed by France and Germany. Barroso was a compromise choice of countries big and small, members new and old and parties right and left. "If he is seen to be a creature of any one of them, he will not be able to function," says John Palmer, political director of the European Policy Centre.

Barroso's first exposure to political battle came at the age of 9, when a favorite teacher would show up on Mondays in bandages after street protests. By the age of 13, recalls a childhood friend, Barroso was redrawing organizational charts of government ministries. When Margarida Sousa Uva, his future wife, first saw him deliver a fiery speech in the canteen during their first year at university, she thought him a "real fanatic." The Maoist label annoys Barroso, because it suggests he has come in from the fringe, when most of the current Lisbon elite spent 1975 in the streets. "I honor that part of my life, I'm proud of it," he says. "I don't like people to think that here is someone who changed just for political convenience."

The turning point for Barroso came in 1976, when he spent several months in London to care for his dying father and had his first encounter with a democratic society, opening his eyes to the brainwashing, totalitarian rule of his own party. After reading descriptions of Portugal as "an insane asylum run by the inmates," he quit the Maoist party on his return. By the late '70s Barroso and Sousa Uva were doing postgraduate work in Geneva when they found a new political guru: Francisco Sa Caneiro, the charismatic leader of the Social Democratic Party (PDS), who offered hope for a democratic Portugal. "This was our reflection period," says Sousa Uva. They married in September 1980, and were so upset when Sa Caneiro died in a plane crash three months later that they rushed back to Lisbon for the funeral. They joined the party the next day. Barroso's political career took off in 1985 when the PDS won elections and tapped him as deputy minister of the Interior at the age of 29, and of Foreign Affairs at 31.

He would make his name as a political prodigy in Africa, leading peace talks between the Soviet-backed government and U.S.-armed rebels in Angola. He was "unflappable" through endless talks, recalls Herman Cohen, then U.S. assistant secretary of State for African Affairs. "He did a masterful job playing the factions off one another." Finally, he brokered a 1991 deal on new elections. But the rebels later rejected the outcome, and the war resumed. "Life is a permanent negotiation," says Barroso.

His strengths on the campaign trail were less impressive. Portuguese journalist Maria de Lurdes Vale recalls seeing him in the election of 1999, recoiling when old ladies in dirty aprons would try to hand him a duck or give him a hug. Still, the intelligence she saw under his rough exterior made her predict he would be the next prime minister. He took office after the PDS victory three years later. "People often underestimate him," says de Lurdes Vale.

Barroso quickly entered a rocky period as a reformer. He learned that the budget deficit was 4.4 percent of GNP, twice what the departing socialists claimed, putting Portugal in breach of the EU's 3 percent cap. Rather than making excuses--as the leaders of Germany, France and Italy are now doing in the face of the same rules--he launched a biting austerity program, freezing civil servants' wages, among other measures. Barroso saw his party's popularity fall even lower than that of the socialists, who were facing a pedophilia scandal. But editorialists applauded, and Barroso denies the lingering popular suspicion that he's a gung-ho free marketeer. "I don't think it's fair to let the next generation pay our bills," says Barroso. "Is this fundamentalist liberal? I think this is just common sense." Today he says increasing European competitiveness is not an "end in itself," but "a means to afford our European social model."

Barroso is understandably wary of labels. He was dubbed an Atlanticist, as if it were an epithet, for hosting a pre-Iraq-war summit in the Azores in March 2003. "I think there is no contradiction between being a European and being an Atlanticist," he says, arguing that it "would be a complete mistake" not to cooperate against global threats. In his meeting with George W. Bush, Tony Blair and Spanish Prime Minister Jose Maria Aznar, summit sources say, Barroso made clear that he had reservations about the war, but would stand by his allies. During an earlier meeting in the White House, he quoted Churchill to remind Bush that "the trouble with allies is that they have opinions." All along, he kept France informed of his plans.

This ability to play the middle helps explain why Barroso has his new job. The leaders of Germany and France backed Belgian Prime Minister Guy Verhofstadt, who opposed the war in Iraq. But they underestimated the reaction of center-right parties that won the recent European elections. At the suggestion of Angela Merkel, head of the German Christian Democrats, they put forward a candidate to stall the nomination of Verhofstadt; British conservative Chris Patten agreed to play the spoiler, say sources in the EPP, an umbrella group for center-right parties. At the June summit, Italian Prime Minister Silvio Berlusconi made such a bravura claim for a center-right president that the vote was delayed.

The search for a compromise ran into the night, and settled on Barroso. Blair slipped into a gathering of center-right prime ministers to plug the Portuguese leader. Once a furious Jacques Chirac realized he was outmaneuvered, he came to back Barroso, who was at least a European integrationist who speaks perfect French, not a British conservative. By the next week Chirac was on the phone to Lisbon, lobbying in support not only of Barroso but also of one of his key demands: no new Portuguese election if he were to go to Brussels. The last thing Barroso wanted was to head off to reform Europe, and leave Portugal to the socialists.

When Barroso's first transition adviser, Brussels insider Mario David, heard that Barroso might have a rough go in parliamentary approval hearings, David insisted that the normally closed sessions be made public. This played to Barroso's strengths: he fielded questions in several languages, made self-deprecating jokes and won the M.E.P.s over by a vote of 413 to 251.

Europe soon got a hint of what Barroso is made of when it came to selecting his commission. The big powers, including France, Germany, Britain and Italy, demanded the posts governing internal markets or competition, which will be critical to the reform process. So Barroso denied them all and gave the posts to small countries. He spoke personally to the leaders of all the European member states about their nominees, and, he says, insisted that at least three change their choices. "Voices were raised," says a close aide. Yet so deft was Barroso's bargaining, even the French and Germans insist they are now pleased. One suspects he will settle the Buttiglione brouhaha just as easily. As for his broader agenda, Tim Evans, a prominent liberal analyst, says that "once or twice a century you get a politician who makes a profound difference," and that Barroso "could just have the sheer will to change the direction of Europe." The moment is right. Is the man?

With Stefan Theil in Berlin, Stryker Mcguire in London and Tracy McNicoll in Paris