The finance ministers from the 19 countries that use the euro are deciding who should lead their regular meetings, with Portugal’s Mario Centeno widely tipped to take the helm of a group that has led the currency bloc’s crisis-fighting efforts.
The decision of who will succeed Dutchman Jeroen Dijsselbloem as president of the so-called eurogroup is expected later Monday. Dijsselbloem, who has held the post for nearly five years, has been one of the most high-profile European politicians during a period that saw a number of countries, notably Greece, teeter on the edge of bankruptcy and the euro currency itself come under threat.
Three other candidates are in the frame, too: Luxembourg’s Pierre Gramegna, Slovakia’s Peter Kazimir and Latvia’s Dana Reizniece-Ozola.
Whoever gets the presidency will inherit a eurozone in far better shape than the one that existed during Dijsselbloem’s tenure. The economy is growing strongly while worries over Greece’s future in the bloc have subsided and the country is poised to exit its bailout era next summer.
A victory for Centeno, who in Portugal has favored easing off budget austerity policies, has the potential to mark a new era for the eurozone.
While eurozone governments still insist that countries must keep their public finances in shape, there’s a greater acknowledgement that many people, particularly in southern Europe, have grown weary of austerity. Following the departure of long-time German Finance Minister Wolfgang Schaeuble, a Centeno victory would encapsulate that shift.
Portugal was one of four eurozone countries that had to be bailed out during the region’s debt crisis. In 2011, the country required a 78 billion-euro rescue after its budget deficit grew too large and bond market investors asked for hefty premiums to lend to the government. In return for the financial lifeline, Portuguese governments had to enact a series of spending cuts and economic reforms.
Though the strategy may have worked in bringing Portugal’s public finances into better shape, austerity accentuated a recession and raised unemployment. Since Centeno took office in the Socialist government that came to power in December 2015, Portugal’s deficit has fallen to 2 percent, the lowest in more than 40 years while the unemployment rate is down to an almost 10-year low of 8.5 percent, after peaking at a record 16.2 percent in 2013.
Ahead of the meeting where the vote will take place, Centeno said his aim, should he come out on top, would be to “generate consensus” in the “challenging” period ahead.
“We have showed everyone that we can reach consensus, we can work with other parties, we can work with institutions,” he said. “Portugal is an example of that.”
Dijsselbloem said keeping the eurogroup “together and united” should be the primary purpose of the eurogroup president.
“It’s the only way we take decisions in the eurogroup,” he said.