Change Edition

Five nations most likely to win musical chairs for top euro job

Five nations most likely to win musical chairs for top euro job

5 min. 06.11.2017 From our online archive
With less than two months to go until Jeroen Dijsselbloem, the head of the group of euro-area finance ministers, steps down, the race for who succeeds him is heating up.

(Bloomberg) With less than two months to go until Jeroen Dijsselbloem, the head of the group of euro-area finance ministers, steps down, the race for who succeeds him is heating up.

While no ministers have officially thrown their hats into the ring ahead of the December elections, some have already expressed interest or started lobbying their counterparts. Finding a successor to Dijsselbloem could prove hard, given the candidate needs to strike a fine balance both geographically and politically -- between North and South, East and West, big and small countries, and between conservatives, social democrats and liberals.

The job is not an easy one either: It requires putting national interests aside, standing up for often-unpopular decisions, moderating contentious discussions and working to accommodate clashing interests. Still, the position is one of the most coveted roles in the EU, both for the power and prestige but also for the global recognition it brings to its occupier. Here are some of the likely candidates:

Bruno Le Maire - the favourite

While only less than a year on the job, the Frenchman has already established a strong presence among his counterparts, leading discussions on topics such as taxation for digital companies and euro-area reform and helping strike a compromise on Greek debt in the summer. A fluent German speaker, Le Maire has also struck a closer rapport with Berlin than his recent predecessors, and helped reinvigorate a Franco-German coordination on economic issues. EU diplomats say he is seen as confident and skilled for the job, as well as able to engage in the diplomacy required to reach difficult compromises.

Still, there are a few factors that could hold him back. For starters his nationality doesn’t help, with France already occupying the top economic post at the European Commission and other key financial jobs. Another issue is his political affiliation. His former time with France’s conservative party could be seen as a red flag for a post that the socialists are eager to keep. And while in the most recent elections he was a candidate with En Marche, Emmanuel Macron’s party, that group has so far not joined any pan-European political party.

Crucially though, his limitations may be domestic: with so many controversial economic overhauls ahead, some EU officials say it may not be prudent for Macron to appoint Le Maire in a job that would shield him from future government reshuffles. What’s more, his appointment as Eurogroup president would preclude the country from occupying other key posts, such as that of the head of the Euro-Working group, the powerful assembly of finance ministry deputies that coordinate the bloc’s policies behind the scenes. France’s representative, Odile Renaud-Basso, is seen by many of her colleagues as the strongest candidate to succeed Austria’s Thomas Wieser, whose term at the help of the so-called EWG expires in January.

Pierre Gramegna - The dark horse

The former diplomat has a few things going for him, and is in the eyes of euro-area officials the dark horse of this race. Coming from a small country but with a long tradition of EU leadership, the Luxembourger is seem as having the institutional and managerial know-how as well as the diplomatic prowess to do the job. Plus he is in a coalition government, meaning he has experience in striking deals that require balancing conflicting interests.

Politically, Gramegna is also on good footing as a member of a liberal-led government, which puts him in a better position than Le Maire, but perhaps not as good as another socialist. His main problem however, is that he is from Luxembourg. The country already occupies the post of European Commission president -- the EU’s most coveted role. Giving another key role to a country representing 0.1 percent of the EU’s population could raise eyebrows, especially among smaller countries that are not occupying any top post.

Still, Gramegna could be the dark horse of the race, officials say, since a process of elimination taking into account geographical and political considerations leaves him as the leading candidate for the job.

Mario Centeno - The southerner

The Portuguese finance minister is one of the socialists eyeing the post, giving him an edge over other candidates. Centeno has overseen the Portuguese economy as it has been strengthening in the years after its bailout, and has brought the country’s deficit within EU limits. He has also been finance chief in a coalition government, balancing out different priorities while trying to keep the budget in check.

While Centeno’s politics are an asset, the former central banker could still be held back by the stigma attached to a post-bailout country. Crucially, officials say Mr. Centeno doesn’t have the experience or authority over his counterparts needed for the job, and hasn’t assumed a leading role in any of the group’s past discussions.

Peter Kazimir - The socialist

Another socialist entertaining the thought of being a candidate is Slovak Finance Minister Peter Kazimir. The politician gained notoriety in 2015 with his sometimes controversial statements on the Greek crisis and his tough stance toward then-Finance Minister Yanis Varoufakis.

While a socialist, Kazimir has been more hawkish on economic issues, and often sided with former German Finance Minister Wolfgang Schaeuble’s tough lines. While coming from a small and relatively new EU member, Kazimir is one of the longest-standing members of the group. He has also gained some experience in consensus-building and moderating when he served as president of the group of EU finance ministers during the six months when his country held the rotating presidency of the bloc.

Still, even though Kazimir is one of the few candidates from the center-left who meet the fiscal hawkishness profile to be acceptable by the center-right, some EU officials question whether the Slovak finance chief has the clout and diplomatic flair needed to take on the job.

Pier Carlo Padoan - The outsider

The Italian finance chief is a respected and powerful member of the group, seen as having the required economic expertise and political clout. He has often opposed Germany on its strict interpretation of fiscal rules and fought for more risk sharing in the euro area. His socialist credentials are also a plus for some, as is his support of stronger integration in the bloc.

But the Italian finance chief has two key drawbacks that make it all but impossible for him to land the job. First, Italy already occupies the top euro-area financial post, that of the European Central Bank president, while an Italian is also the top civil servant in the European Commission’s economic department, and another one heads the European Banking Authority in London.

Crucially, the country is holding an election next spring, meaning Padoan could just have a few months left in his job. This would mean this whole process of selecting a president risks starting all over in the spring, leaving the group leaderless when discussions on the future of the euro area will be at their most critical stage.