BRUSSELS: France and Germany have thrown their weight behind creating a permanent president for economic policy in the eurozone, a role that would mark a fundamental overhaul of how the currency bloc is managed.
Their backing calls into question the performance of Dutch Finance Minister Jeroen Dijsselbloem, who was appointed chairman of the Eurogroup of finance ministers of the 17-nation currency area in January, to serve initially for two-and-a-half years.
Dijsselbloem, who succeeded Luxembourg Prime Minister Jean-Claude Juncker, has unsettled financial markets since taking office, especially with comments about Cyprus and how bank depositors could finance future bailouts.
Those views, while supported by some at the European Central Bank and the European Commission, have irked other officials in Paris, Berlin and Brussels.
At a meeting in Paris on Thursday, President Francois Hollande and Chancellor Angela Merkel agreed to propose to fellow leaders appointing a permanent Eurogroup head, which France has long favoured.
“A full-time president of the Eurogroup with reinforced powers, including the possibility of delegating power to other euro zone ministers,” their joint “contribution” to next month’s EU summit said under the heading “Reinforcing euro zone governance and legitimacy”.
Merkel’s spokesman said the aim was to create a position with a much more dedicated focus on euro zone issues. “It should not be a euro zone finance minister but a president whose job would be to coordinate work intensively,” said Steffen Seibert. “It will be a very demanding job.”
The Franco-German document said the proposal should be implemented within two years. It also said euro zone leaders should hold more frequent summits than the two annual sessions they already have and be able to instruct specialist ministers of the euro zone to work more closely on issues such as employment, social affairs, research and industry.
widening the gap
Both moves could widen the gap between a eurozone core and other member states of the European Union that are not in the single currency, and put national governments rather than the European Commission in the driver’s seat.
When he was appointed, Dijsselbloem, 47, had only been a minister for a couple of months and had little experience of finance. But he was seen as the best of those available from among the 17 ministers that sit in the Eurogroup.
His style has been remarkably different to Juncker’s, who held the job for nearly 8 years and was accustomed to the backroom dealing of European Union politics. Juncker once said that “when it becomes serious, you have to lie”.
Dijsselbloem, on the other hand, has been all about telling it straight, but his openness, especially over Cyprus, is what has most unsettled markets and put EU leaders on edge.
“He has not covered himself in glory,” said one French policymaker after Dijsselbloem told Reuters in an interview that unsecured bank deposits could be used to bail out banks in future rescues, in much the same way as in Cyprus.
“As (former French President) Jacques Chirac would have said, he missed a good opportunity to shut up.” Speaking on a visit to Greece, Dijsselbloem said the euro zone did not need a permanent Eurogroup chief now, but the question could be revisited in late 2014.
“The Eurogroup is now functioning under my presidency and I will be happy to do that at least until the end of 2014,” he told reporters in Athens, adding that he did not feel insulted.
Dutch Prime Minister Mark Rutte was more dismissive.
“The risk of a permanent chair of the Eurogroup is that it will become a political position and it will create more inter-institutional competition between the European states,” Rutte told reporters. “We are strong supporters of its independence. The current construction is the one we prefer.”
Reuters
