Saturday

23rd Mar 2019

Luxembourg leader set to extend euro zone reign

  • Mr Juncker has served as Eurogroup chairman for five years (Photo: European Commission)

Luxembourg's Prime Minister, Jean-Claude Juncker, looks set to receive a fresh mandate under Lisbon Treaty rules as head of the 16-nation group that shares the euro currency.

"We all agreed that in January the Eurogroup president (chairman) will be elected for two and a half years," Mr Juncker told a news conference after a meeting of euro area finance ministers on Tuesday (1 December).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The Lisbon Treaty – a new EU rulebook that started on 1 December - brings about a number of institutional changes, including the extension of the Eurogroup chairman's working mandate from 2 to 2.5 years.

Mr Juncker's current term is due to expire at the end of 2010, but he now has strong backing from member states to stand for re-election in January.

"He is today the only candidate," French economy minister Christine Lagarde told journalists after the meeting.

The Luxembourg politician has already served as Eurogroup chairman for five years, with Italy expressing an interest in the post earlier this year having failed to secure the European parliament presidency position.

"I see that position would fit our finance minister Giulio Tremonti," Italian Prime Minister Silvio Berlusconi told journalists at the end of a EU summit in June.

Euro too strong

As well as the institutional housekeeping decision, ministers discussed the strength of the euro currency, with all agreeing it was over-valued. The IMF's Europe director, Marek Belka, also attended the meeting and cautioned over the euro's strength.

Mr Juncker briefed ministers on his recent visit to China with EU economy commissioner Joaquin Almunia and European Central Bank chief Jean-Claude Trichet.

"We see it as abnormal that a fast-growing economy devalues its currency in relation to a currency zone where growth performance is far less positive," he said, pointing to China's eight percent GDP annual growth rate.

Euro area growth is forecast to be positive but below one percent next year, with politicians and business leaders concerned the euro's strength versus other currencies is harming the region's export competitiveness.

However Mr Juncker was not overly optimistic about the outcome of his recent visit.

"We came back from China, not exactly reassured but at least we got out message across," he said.

Greece

The ministers also discussed the poor state of Greek public finances, with Mr Almunia citing the need to keep up pressure on the new Socialist government to bring down deficit levels, forecast to exceed 12 percent of GDP this year.

"The problems in Greece are problems of the euro area," he said. The country's debt total is expected to reach 124 percent of its GDP next year, the highest in the euro area.

This has raised the cost of borrowing money on the markets for the Greek government, with investors increasingly concerned about a possible default.

However Mr Juncker moved to quell rumours of a possible bankruptcy, and expressed confidence in the new administration's ability to tackle the challenges. "There is no hint of bankruptcy as far as Greece is concerned," he said.

The Greek government recently announced its budget for 2010 that aims to bring the deficit down to 9.1 percent for that year.

Mr Juncker welcomed the initiative but said other reforms should to be implemented, and did not rule out the need for a supplementary budget later next year.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Vestager says 'no' to Siemens-Alstom mega-merger

The EU blocked the merger of the makers of Germany's ICE and France's TGV trains, citing concerns of reduced competition and extra costs for consumers and taxpayers. The two countries now want to change the rules.

News in Brief

  1. EU leaders at summit demand more effort on disinformation
  2. Report: Corbyn to meet May on Monday for Brexit talks
  3. Petition against Brexit attracts 2.4m signatures
  4. Study: Brexit to cost EU citizens up to €40bn annually
  5. NGOs demand France halt Saudi arm sales
  6. Report: Germany against EU net-zero emissions target
  7. Former top EU official takes job at law firm
  8. Draft text of EU summit has Brexit extension until 22 May

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. Italy takes China's new Silk Road to the heart of Europe
  2. What EU leaders agreed on climate - and what they mean
  3. Copyright and (another) new Brexit vote This WEEK
  4. EU avoids Brexit crash, sets new date for 12 April
  5. Campaigning commissioners blur the lines
  6. Slovakia puts squeeze on free press ahead of election
  7. EPP suspends Orban's Fidesz party
  8. Macron is confusing rigidity with strength

Join EUobserver

Support quality EU news

Join us