EU personnel carousel
March 17, 2012
"You heard Mr. Juncker’s announcement at the last European summit that he isn’t planning to continue," said German Finance Minister Wolfgang Schäuble, after the Financial Times Deutschland reported that Chancellor Angela Merkel intends to see him appointed him as the head of the Eurogroup of Europe's finance ministers.
But Schäuble refuse to be drawn on his potential job. "I have no further information regarding the issue. We have other issues at the moment," he said. "Speculation about personnel matters might be interesting for the media, but there are other issues facing us.”
Merkel has reportedly been lobbying other government chiefs for Schäuble, 69, to take over from Luxembourg Prime Minister Jean-Claude Juncker when he steps down in June. This would make Schäuble the next to step on the personnel carousel currently keeping the European bureaucrats busy.
The EU has four vital vacancies to fill over the next few weeks. Apart from the chairman of the Eurogroup’s 17 finance ministers, there's a position on the board of the European Central Bank, the head of the permanent European Stability Mechanism (ESM), and the head of the European Bank for Reconstruction and Development (EBRD). European leaders have agreed to distribute these posts as a package all at the same time.
A few days ago, Schäuble told Greek newspaper To Vima that Juncker's successor should come from a country with a top AAA credit rating. This excludes a lot of countries - of the 17states that use the euro, only four still have the highest rating: Luxembourg, Finland, the Netherlands, and Germany.
Is Juncker resigning in June 2012?
At the last EU summit in early March, Juncker said that the demands of holding down two jobs was one reason he was planning to resign as Eurogroup.
“I’m simply running into time problems," said the 57-year-old. "The crisis is making it hard for me to do my job in Luxembourg properly and to combine it with the very challenging and time-consuming Eurogroup job.”
The EU’s oldest head of government has toyed with the possibility of stepping down from the Eurogroup job on several occasions. He first took the position in 2005, and has since been re-elected three times - his current tenure could run until 2014.
Throughout his time in office, Juncker has been pressing for the Eurogroup to gain more institutional power. In several interviews, he criticized the way Merkel and French President Nicolas Sarkozy were dealing with the debt crisis, saying the smaller member states shouldn’t have to do the Franco-German’s bidding.
In contrast to Merkel, Luxembourg’s Premier – whose country makes much of its money as a preferred financial location due to its favourable tax legislation – supports the idea of introducing eurobonds. Juncker also wants all eurozone countries to take on debts together, and is skeptical about Germany’s plan to introduce a tax on financial transactions.
Part of a big deal
Smaller eurozone countries could have reservations against appointing the finance minister of the EU’s economic powerhouse as their financial chairman. Schäuble stands for a path of strict austerity, but in his interview with To Vima, he brushed off the allegation that Germany was using its power to dominate Greece or Europe.
Juncker had tipped Italy’s Prime Minister - and Finance Minister - Mario Monti as his favoured candidate. But when asked by the press, Monti said simply, “Do you think an Italian prime minister can take on extra duties?“
There’s another factor to Juncker’s announced resignation: the chairman of Luxembourg’s Central Bank Yves Mersch is said to want a posting on the board of the European Central Bank. It’s highly unlikely that the Eurogroup’s second-smallest country Luxembourg would be allowed two such influential positions.
But with Klaus Regling as head of the rescue fund and Thomas Mirow as President of the Development Bank in London, two of the EU’s most important financial posts are already being filled by Germans.
Olli Rehn has also occasionally been tipped as candidate to chair the Eurogroup. The current EU commissioner for currency issues comes from Finland, a country with the triple A rating, and has worked side by side with the finance ministers throughout the debt crisis.
At the last EU summit, Herman Van Rompuy from Belgium was re-elected for another two and a half years as President of the EU Council and will continue to chair the summits of the EU’s heads of state and government. According to diplomats, it’s a position Juncker would have liked to have taken over.
No formal decisions, but an influential position
The Eurogroup meets once a month to discuss the group’s budget and finance politics. The body became an official EU institution through the Lisbon Treaty, albeit without the right to make legally binding decisions.
This is entirely the responsibility of the council of all 27 finance ministers, who always convene the day after the Eurogroup. The Eurogroup’s more informal meetings gained considerable importance during the financial crisis, since the eurozone bailout fund, which was set up to help indebted countries, is an institution exclusively under the responsibility of the euro countries.
They decide about the billions of euros in loans given to Greece, Portugal and Ireland. The meetings are also attended by the President of the European Central Bank and the EU’s Currency Commissioner.
Internationally, Juncker is seen as "Mr. Euro.“ He is known for his pointed remarks towards the press and will occasionally drop the odd word of veiled criticism about certain EU leaders.
He has for years been a doyen of the many meetings and summits of the EU leaders in Brussels. His advice is much respected, since his long years of expertise date back to before he became prime minister.
Even before taking office in 1995, the conservative politician had represented Luxembourg as a minister at many summits.
In early March, when he announced that he would step down as the chairman of the Eurogroup, Juncker said of his successor: "It has to be someone who is willing to listen to whatever thoughts are floating around in all four corners of the eurozone: North, South, East, and West." This description, of course, fits one person best: Juncker himself.
In principle, EU leaders agreed in December 2011 that the chairman of the Eurogroup should be someone who has served or is serving in government. But they also agreed that the position should become a full-time, rather than a part-time job. This would make Schäuble a less apt candidate for the position – unless, of course, he steps down from his current job in the federal government.
Author: Bernd Riegert / nh
Editor: Ben Knight