EUROPEAN DIARY:The imminent exit of the euro group president has Berlin and Paris jockeying for position in what will be a pivotal appointment
On top of the other problems besetting them, euro zone leaders will have to settle in coming weeks on a successor to Jean-Claude Juncker at the helm of euro group of finance ministers.
Juncker, a dogged survivor, has been prime minister of Luxembourg since 1995. On Monday he said he will stand down at the end of the year of the beginning of 2013 as euro group president, a post he has held since 2005.
This presents a conundrum, for the job is crucial. If the euro group is the prime fire-fighting forum in the debt saga, the role of its president is to act as consensus-seeking chairman bringing ministers with competing interests together.
Juncker’s last official term finished earlier this year but the lack of a successor acceptable to all led to him staying on. His mandate will not lapse until next July so his imminent exit has raised questions as to whether a succession plan is falling into place.
The reason Juncker is still in place is that other countries would not agree to the nomination of German minister Wolfgang Schäuble. Although Schäuble’s European credentials are impeccable, it was seen as a step too far to give the job to “the German” at a time when Berlin dominates the response to the crisis.
Big question
France, under newly elected president François Hollande, was in the vanguard of the naysayers.
The next idea was some kind of a job-share between Schäuble and his French counterpart Pierre Moscovici, but that too fell by the way. Moscovici was hardly in the door, after all.
The big question in Brussels right now is whether this kind of arrangement is back in play. “What’s not clear is whether there is a deal between Moscovici and Schäuble, or whether they find another victim,” says a European official. “That’s what people are trying to find out.”
Use of the word “victim” points to the complexity of what is likely to be a thankless task. The idea of a job-share raises several tricky questions.
First, Schäuble would still be in the chair at times. Whether a junior minister would represent Berlin is unclear but such a scheme would still be open to claims that it is weighted too heavily in Germany’s favour.
Another concern is that Schäuble’s power to sway the negotiation will be compromised if he is in the chair. His job in that scenario would be to broker a compromise, not to hold the line for Germany.
Further uncertainty surrounds the schism between Hollande and German chancellor Angela Merkel. Each has a fundamentally different approach to the crisis, with the chancellor favouring fiscal rectitude over Hollande’s attachment to the drive for economic growth.
Small countries
Whether their finance ministers could bring coherence to the euro group in that scenario must be in question.
So too is whether a president from either of the big euro zone powers would keep in mind the interests of small countries like Ireland. Remember the Franco-German assault on Ireland’s corporate tax regime? Although Juncker’s idiosyncratic ways and rambling press conferences sometimes frustrate his colleagues, he remains politically adroit and his role as prime minister provides an important nexus between the minister and the summit chamber.
“He is irreplaceable,” said Moscovici. Still, he dismissed suggestions that Juncker would be asked again to stay on. As to whether Moscovici is in line for the post on his own, he was “surprised and flattered” to be considered.
Another potential candidate is Finnish minister Jutta Urpilainen, who has the merit (from Germany’s perspective at least) of coming from a country with a triple-A credit rating. She may face a hurdle because the economics portfolio in the EU Commission is in the hands of another Finn, Olli Rehn.
Urpilainen would hardly be a boon for Ireland. She is at one with Germany’s rejection the ESM fund taking on the historic banking debts of other countries. She has said Finland would sooner leave the euro than pay the debts of others.
Rescue plan
A further suggestion is that the job goes to Finnish PM Jyrki Katainen. Importantly, this would provide a link to the summit room.
Other figures may prove more problematic: Austria’s Maria Fekter is too outspoken; Italy’s Vittorio Grilli serves in a technocratic administration; Luxembourg’s Luc Frieden may suffer from the fact his country just secured a seat on the executive board of the European Central Bank; and Spain’s Luis de Guindos is preoccupied with the battle to avert a full-blown rescue plan.
The job will not go to bailout recipients such as Greece, Ireland or Portugal.
This is one to watch.
