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22nd Jul 2018

Dijsselbloem to chair Eurogroup despite Spanish opposition

  • Dijsselbloem has been a finance minister since November (Photo: Partij van de Arbeid/Willem Pekel)

Jeroen Dijisselbloem has been appointed chair of the 17-member Eurogroup after eurozone finance ministers rubber-stamped his appointment in Brussels.

At a meeting on Monday (21 January) the Dutch finance minister was backed to replace veteran Jean-Claude Juncker, the Luxembourg Prime Minister who has held the job since its creation in 2005.

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However, the appointment attracted some unexpected controversy after his Spanish counterpart Luis de Guindos, refused to endorse Djisselbloem.

The Spanish delegation refused to say why, but it is widely believed to reflect fears that he will be too pro-austerity for Spanish taste due to his position in a Liberal-led Dutch government.

Quizzed by reporters after the the meeting, Djisselbloem confirmed that his election had "not been unanimous," although he insisted that de Guindos had given assurances that he would work with him "in a very professional and positive way".

That said, the Spanish move came as a shock to EU officials, with some concerned that a political wedge is being driven between the so-called "virtuous" northern countries and the crisis-hit Mediterranean states.

Meanwhile, Djisselbloem said that his first task in the Eurogroup would be to drive a deal on the proposals for a banking union in the eurozone.

In a remark for the benefit of journalists now accustomed to Eurogroup meetings running later and later each time, he remarked that "hopefully the eurozone will allow us to meet at normal hours and not until very early in the morning."

Turning to Juncker, Djisselbloem told reporters that the Luxembourg leader had been "an outstanding President, making far reaching decisions in a very difficult time."

In his parting statement, a visibly relaxed Juncker told reporters that he had "come to love and admire Europe all the more" in his Eurogroup work.

He also offered fulsome praise for crisis-hit Greece, Ireland and Portugal, commenting that he had "every admiration for what Greece has achieved" and offering the same support to Ireland and Portugal, which, he hoped, would be "recompensed for their efforts."

The veteran negotiator, who has also served as his country's prime minister since 1995, reiterated his plans to go back to national politics and try for another term in government.

Earlier, Dijsselbloem, Klaus Regling (the head of the EU's bailout fund, the ESM) and economic affairs commissioner Olli Rehn led praise for Juncker's time in office, with Regling describing him as "one of the true great Europeans of our time" and with Rehn offering thanks for his "tireless work on the stability of the eurozone through many long years and long nights."

For his part, Juncker welcomed Djisselbloem into the job, emphasising his conviction that the Dutchman "embodies all the qualities that will allow him to step elegantly into this function."

In business matters, Regling confirmed that €7.2 billion of bonds would be transferred to recapitalize Greek banks along with €2 billion in cash, with both decisions to be approved by the ESM board next week.

The EU bailout fund will also disperse €4.8 billion to Portugal in early February, he added.

Ministers confirmed that agreement on a €17 billion rescue plan for Cyprus would be delayed until after the country's presidential elections in March, with Juncker noting that "Cyprus' short-term funding needs are covered."

EU officials also said that emergency plans to stabilise the Spanish banking system are on track.

Regling noted that a further €1.8 billion would be paid to Spanish banks, adding that the overall rescue package was expected to be €41 billion, far below the €100 billion cost projected in autumn last year.

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