The Portuguese finance minister, Mário Centeno, will become new chairman of Eurogroup and is thus at top of Europe’s most important financial body. The 50-year-old, who was elected by finance ministers of 19 member States of monetary union at ir meeting in Brussels, follows Dutch Jeroen Dijsselbloem, who gives office after just under five years and planned two terms of office.
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After two rounds, Centeno fought against his competitors: Slovaks Peter Kažimír, Luxembourger Pierre Gramegna and Latvian Dana Reizniece-Ozola. Their prospects, however, even previous Eurogroup leader already estimated as low before election. “I am president until 12th January and Mário Centeno on January 13,” Dijsselbloem had said before meeting of finance ministers. Then he paused briefly and added, “Did I say Mário Centeno? Well, I really don’t know. Apparently that’s in my head. I’m sorry. “
“No matter if south, north, east or west”
Centeno is an economist and initially worked for Portuguese central bank. Since November 2015, Social Democrat has been at head of Ministry of Finance in Lisbon. With him, Eurogroup is experiencing two premieres: for first time a sourn is leading group and for first time a representative of a former euro-crisis country represents euro finance ministers – Portugal had euro bailout umbrella in financial crisis 2011 Taken.
According to Centeno, however, he does not want to be understood as a candidate of sourn Europe, but as someone who achieves consensus across party boundaries. Europe, with its large society and world’s largest internal market, must show its “strengths” and complete its institutions – “Wher you come from south, north, east or West”. For him it is an honor to lead group, said Centeno.
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The Eurogroup, which has been meeting since 1998, has gained great importance, especially since management of euro debt crisis in recent years. Among or things, ministers are deciding on billion-dollar aid programmes and partly harsh reform requirements for crisis countries, as well as direction of Europe’s economic and financial policies. The Eurogroup chief has a prominent role in this, as he is also chairman of Board of Governors of euro bailout fund ESM. This gives billions of heavy loans to ailing euro countries. Aid requests from States in financial distress must be sent to Eurogroup chairmen.
Centenos home country Portugal was still one of biggest worries for children in eurozone until some time ago. It was only with difficulty that country had been saved from bankruptcy, after years of austerity and reform measures, and a good three years under euro bailout, Portugal has been financially back on its own feet since May 2014. 2016, with 2.1 percent of gross domestic product, lowest budget deficit has been registered since 1974. Portugal experienced a remarkable upturn under a socialist minority government, but re are still worries about banks ‘ balance sheets due to a number of bad loans.
Reality Check for Macron visions
The new Eurogroup leader will refore have to take care of a furr stabilisation of euro-crisis countries. However, eurozone is in a much better state than it was when Dutch took over Dijsselbloem. The eurozone economy is growing well, worries about future of Greece in currency area have decreased.
The challenges of monetary union reform are all greater. Some call for Eurogroup leader to be equipped with much more competencies and to make him Vice-President of EU Commission and a kind of EU finance minister. That had called for Emmanuel Macron. France’s president also wants its own budget for eurozone. The debates on this, however, are still at an early stage, not least due to faltering formation of government in Germany, alongside France being most important country in eurozone.
An anti-Schäuble
With election of Centeno, however, this supremacy ends for some observers. “A good choice for urgently needed turnaround in European economic and financial policy,” said SPD MEP Udo Bullmann. “Centeno is anti-Schäuble among Europe’s finance ministers,” said Greens MEP Sven Giegold with a view to rigid austerity that former federal finance minister Wolfgang Schäuble (CDU), in particular, wanted to push through with euro colleagues. “Portugal has successfully refuted Schäuble’s Austeritätsdogma. Centeno has shown that necessary structural reforms do not save, but invest right way, “says Giegold.
Germany had not previously agreed on a candidate. After election, managing federal Finance Minister Peter Altmaier (CDU) was satisfied with fact that Eurogroup had set itself up on Centeno with a “very, very broad majority”. He had already asked for this signal of unity before. He hoped Altmaier had said at end to “a clear signal (…) that Eurogroup is closed”. The choice of Centeno is “also a recognition of hard and successful reforms that Portugal has made”.
