Friday

6th Dec 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 20 years of archives. 30-day 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

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

EU agrees 2020 budget deal

EU governments and the parliament agreed in marathon talks ino next year's budget - which will boost spending on climate, border protection, and the European satellite system. It will also be a benchmark if there is no long-term budget deal.

EU and China agree to defend 'gastronomic jewels'

Manchego cheese, Panjin rice and Polish vodka will all be protected under a new EU-China agreeement. But the two trading giants continue to struggle over other trade-related deals.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Searching for solidarity in EU asylum policy
  2. Will Michel lead on lobbying transparency at Council?
  3. Blood from stone: What did British PR firm do for Malta?
  4. EU Commission defends Eurobarometer methodology
  5. Timmermans warns on cost of inaction on climate
  6. Development to fuel change
  7. Does EU have role in stopping backsliding in Georgia?
  8. Swedish candidate adds heat to EU ombudsman vote

Stakeholders' Highlights

  1. UNESDAUNESDA appoints Nicholas Hodac as Director General
  2. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  3. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  4. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  5. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  6. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues

Join EUobserver

Support quality EU news

Join us