Will Jeroen Dijsselbloem remain President of the Eurogroup?


The President of the Eurogroup Jeroen Dijsselbloem told CNBC on Saturday that he wants to remain in office until January 2018.

Dijsselbloem is the finance minister of the current caretaker Dutch government since Dutch parties have been unable to form a new government since the country went to the polls in March 2017.

Most Dutch political analysts expect a new four-member coalition government to be formed this autumn, without the participation of Dijsselbloem’s Dutch Labour Party (PvdA). In March, PvdA suffered one of the worst electoral disasters in its history, losing 29 seats and bringing its grand total to merely nine. PvdA could still play a role in government, but its new leader, Lodewijk Asscher, has insisted the party needs to remain out of office to consolidate its new political identity.

The chief of the Eurogroup is in his second terms as President of the 19-member Council of the Eurozone’s Ministers of Finance. In the past, Dijsselbloem faced calls for resignation as he has no political legitimacy given that he is not even a member of parliament. Moreover, he has alienated Europe’s southern governments by suggesting in March 2017 that they blew their money on “drinks and women.”

There are few months remaining before the end of his term, although this is a critical period for the Eurozone in which the Franco-German axis is promoting political integration. The question of whether he will be allowed to remain in office is likely to be revisited in autumn.

Austrian support

The head of the Eurogroup of finance ministers should keep his post until his term ends in January even if he loses his job as minister at home, Austrian Finance Minister Hans Joerg Schelling said on Thursday.

There has been widespread speculation that Jeroen Dijsselbloem will lose his European post, which must be held by a finance minister, given his Labour party’s poor showing in the last Dutch parliamentary election.

But he has kept his role while negotiations on forming a new coalition government have dragged on for months.

“Interestingly there is no rule on whether someone can see out their mandate if they are no longer a minister,” Schelling told Reuters in an interview.

Schelling cited the German parliamentary election on Sept. 24 as one reason not to “weaken” the group by changing its head, adding that euro zone finance ministers had not yet discussed who should succeed Dijsselbloem.

“If surprisingly the Netherlands were to form a government — they have been working on it for a long time — and it happened in, say, September, then my personal opinion is that Jeroen Dijsselbloem should see out his mandate until January and that in the meantime the time should be used to agree on a succession plan,” Schelling said.

Schelling’s conservative People’s Party is running first in opinion polls ahead of Austria’s parliamentary election on Oct. 15. He said whether he kept his job would depend on coalition talks but he hoped to stay on in the finance minister role.

Schelling also said he backed the idea of developing the euro zone’s European Stability Mechanism (ESM) rescue fund into a European monetary fund.

“I think this discussion is advisable, sensible and necessary,” he said, adding that he was more conservative on how long it would take than his German counterpart Wolfgang Schaeuble, a proponent of the idea.

“It is a long-term project. It won’t happen from one day to the next,” he said, adding that he thought it would require changes to the European treaty and the issue of how the fund would interact with the International Monetary Fund needed to be settled.

“I don’t see it happening in under 3-5 years… If I have understood Wolfgang Schaeuble correctly, he is saying three years,” he added.

Portuguese succession?

Portugal’s finance minister, Mário Centeno, has indicated that there is a possibility of his taking over as president of the Eurogroup, the informal grouping of euro-zone finance ministers, when the current incumbent, Jeroen Dijsselbloem of the Netherlands, steps down.

In an interview with the Spanish newspaper El Pais in Santander, where he was taking part in a conference at that city’s Universidade Internacional Menéndez Pelayo, Centeno was asked whether he “will be a candidate” to the Eurogroup presidency.

In his reply, he was clear about not ruling this out: “I won’t say that there is no possibility.”

In April Portugal’s Expresso newspaper reported that Centeno had been among those sounded out as possible candidates for the influential position, prompting a flurry of comments in Portugal and in Brussels.

In the El Pais interview, the Portuguese minister also talked about the improving economic situation in Portugal, which he said was thanks to three factors: “cleaning up the financial system… the stabilisation of the banks [and] the political change”.

The latter was a reference to the programme of the minority Socialist government, which has restored spending power above all for public sector workers since it took office in late 2015.

According to Centeno, “at the start things were difficult” so far as relations with the European Commission when the government loosened the purse strings, because the commission saw it “as a government without experience”. European Union officials were wrong, he said: “we met the budget targets and exited Excessive Deficit Procedures.”

EU governments voted in June to end the deficit procedures applied to Portugal since 2009, after the commission had the previous month recommended that they do so.

Centeno acknowledged in the El Pais interview, though, that “the work is not ended” where the economic crisis goes. “Reforms need time, even if that isn’t the Brussels recipe.”