Juncker chairs final Eurogroup as Dutch wait in wings

Juncker chairs final Eurogroup as Dutch wait in wings

After eight years as firefighter in chief, Luxembourg Prime Minister Jean-Claude Juncker presides over his last meeting as chair of the Eurogroup on Monday.

The first gathering of eurozone leaders of the year will be dominated by Juncker’s succession — with newly-installed Dutch Finance Minister Jeroen Dijsselbloem the only candidate after weeks of horse-trading between the currency area’s German and French powerbrokers.

The meeting, starting at 1600 GMT, is meant to look at other burning eurozone issues like tardy debt negotiations with the government of Cyprus and the long shadow of Russian money-laundering hanging over Nicosia’s request for a bailout since mid-2012.

Ministers from the 17 eurozone states are also due to tackle the thorny question of “legacy assets”, or what old banking debt can be considered eligible in the event of future recapitalisation of lenders by the eurozone rescue fund, the European Stability Mechanism.

The latter was a problem that first surfaced after the ESM’s capacity to do this job — keeping bailout monies off government deficits in theory — had seemingly been agreed, and was the product of a special meeting between Triple A-rated Germany, the Netherlands and Finland.

Juncker’s style is inimitable in the world of government and finance, and his longevity can only be compared to someone like Sir Alex Ferguson in football, but the eurozone’s top day-to-day official, Thomas Wieser, says the passing of the baton to Dijsselbloem will not change much.

“The working methods will stay the same in Manchester when Ferguson moves on, and the working methods will stay the same in Brussels after Juncker goes,” he told journalists on Friday.

Dijsselbloem formally announced his candidacy the previous day in the Dutch parliament, and after a flying visit that evening to Madrid to secure Spain’s backing, was unchallenged as a notional Friday deadline for a rival to emerge came and went.

The French were reluctant to miss out on control of the Eurogroup — at a time when the institution’s cross-border powers within a fractious wider European Union are only likely to increase.

Giving the leadership to the tough but successful “north” leaves Socialist-governed France edging closer to their more financially-challenged Latin neighbours, and Paris coveted this position itself for long and weary.

“I want to thank Juncker for his work at the Eurogroup … (and) all the advice he has given me as a newcomer to this financial world,” said Dijsselbloem, 46, after meeting Juncker in Luxembourg on Friday.

“We’ll see Monday how it goes. My French colleague has asked for a presentation of … (my) vision for the Eurogroup,” he said.

Germany reiterated afterwards that it had campaigned for months on the Dutchman’s behalf.

The fact Dijsselbloem is left-leaning politically may soften the blow when hands are raised over dinner to confirm the passing of the reins, but seasoned observers wonder if the change nonetheless symbolises an acceleration in the pressure on southern eurozone economies to change political course.

Juncker will almost certainly give his final de-briefing to EU counterparts from Britain and elsewhere on Tuesday morning, after which the job of marshalling governments of different hues into common action underpinned by a shared currency will fall to a relative novice.

Cyprus will feature heavily in Dijsselbloem’s in-tray, although a senior EU official warned it would still be “months” before anyone is ready to hand over actual loans.

Ireland’s bid to exit its EU-International Monetary Fund aid programme before the year is out will also figure prominently, with rumbling rows about interest rates on aspects of its heavily banking-sector slanted bailout.

Tuesday’s meeting of all 27 EU finance ministers, meanwhile, will focus on a bid by an inner cabal of eurozone states to launch a tax on financial transactions.

Breitbart Video Picks