Left-leaning Dijsselbloem elected to succeed Juncker despite resistance from Spain

Dutch finance chief to lead Eurogroup

AFP-JIJI

Jeroen Dijsselbloem of the Netherlands took over Monday as chairman of the key Eurogroup of finance ministers, despite resistance in a vote to replace Luxembourg’s Jean-Claude Juncker.

“We appointed the Dutch Finance Minister Jeroen Dijsselbloem to become the new president of the Eurogroup,” Juncker told a news conference after barely five hours of talks.

A Eurogroup statement said that Dijsselbloem was given a 30-month term and that he “will retain his (Dutch) post whilst chairing the Eurogroup.”

The decision — opposed by one government confirmed by German Finance Minister Wolfgang Schaeuble to be Spain — brought to an end eight years mostly spent battling global financial headwinds that morphed into the eurozone debt crisis for Juncker, Luxembourg’s prime minister, who is Europe’s longest-serving national leader.

Dijsselbloem told a news conference that it was “a distinct honor to be given the possibility to succeed Jean-Claude,” saying that “only together can we surpass the current problems.”

He added that it is key to “preserve the social European model that we so much cherish.”

Only appointed nationally in November, Dijsselbloem made a flying visit to Madrid on Thursday night after announcing his lone candidacy earlier that day in the Dutch Parliament.

Still, it was the French who had been expected to cause waves over the succession to Juncker. Paris had vowed to push Dijsselbloem on his manifesto for the year ahead, but a source said in the end, France — given the Dutchman’s backing by euro powerbroker Germany — fell into line. Juncker had admitted on his way into the Brussels talks feelings of “melancholy” and “relief” ahead of the handover, Dijsselbloem in turn hailing newfound “trust” in the euro on financial markets.

With tensions notably eased on markets compared to six months ago when worries were rife about a Greek exit from the euro, or Spain and Italy being forced into bailouts, Dijsselbloem said his job is all about “further restoring trust in the euro and the eurozone — that’s the main task in hand.”

“There seems to be a new basis of trust,” he said, freeing politicians to focus on policies that can help foster “growth and jobs” with Europe currently laboring under a high unemployment rate of almost 12 percent across the eurozone.

“We must take the opportunity of the increased stability that we have achieved to put a stronger focus on preventive policy coordination,” Dijsselbloem said. “Our economic policies need to be geared toward promoting strong, sustainable and inclusive economic growth, ensuring fiscal discipline, enhancing competitiveness and boosting employment, and in particular youth employment.”

Europe must do this, he said, “in order for Europe to remain a highly competitive social market economy and to preserve the European social model.”

Dijsselbloem’s assessment matched that of top economists. “Markets are no longer betting that the ECB (European Central Bank) will commit suicide by letting major member countries implode,” said Holger Schmieding of Germany’s Berenberg Bank.

Even Greece, despite a sixth year in recession, is said by its creditors to be on the mend. But there was little clarity on key eurozone issues going forward, such as a bailout for Cyprus first requested last summer but now seen as increasingly in jeopardy.

Originally expected to lead the agenda at the Brussels meeting, a formal request for aid from Nicosia appears to have gone backward with the long shadow of Russian money-laundering hanging over negotiations.

Schaeuble even questioned whether any bailout should take place. “We have to examine whether the problems in Cyprus represent a danger for the eurozone as a whole,” he told the Sueddeutsche Zeitung. “That is one of the preconditions for the money coming from the euro rescue fund.”