Race Is on for Coveted Euro-Area Job as Four Candidates Emerge

(Bloomberg) -- Four finance ministers have thrown their hats into the ring to take over a top euro-area post, kicking off a race for a position at the helm of the currency bloc as it seeks to strengthen itself in a post-crisis era.

Portugal’s Mario Centeno, Slovakia’s Peter Kazimir, Luxembourg’s Pierre Gramegna and Latvia’s Dana Reizniece-Ozola have applied for the presidency of the Eurogroup -- the group of euro-area finance ministers -- as the five-year crisis-plagued reign of former Dutch Finance Minister and current chair Jeroen Dijsselbloem is coming to an end.

The succession of Dijsselbloem is important not just for the role he holds, but also because of the domino effect it will have on the potential candidates to fill top jobs throughout the European Union as senior posts at the European Central Bank and European Commission come up in the next two years. 

Finding a replacement for Dijsselbloem has been difficult, officials say, partly because the position requires that a complex set of criteria be fulfilled. Top roles at European institutions have been traditionally divided along both geographical and political lines -- between North and South, East and West, big and small countries, and between conservatives, social democrats and liberals.

Key Jobs

With representatives from the center-right European People’s Party holding key jobs at other EU institutions, the continent’s Socialists are fighting to keep this post once Dijsselbloem goes, giving Centeno and Kazimir a leg up on the competition.

Centeno, a Harvard-educated economist, had a shaky first few months at the Eurogroup representing Portugal’s newly elected Socialist-led government. But over the past two years he has overseen the country’s economy as it further reduced its budget deficit and regained an investment-grade credit rating at S&P Global Ratings, boosting his standing among the group.

The outspoken Slovak minister -- and second longest-standing member of the group -- gained notoriety in 2015 with his harsh stance and scathing remarks toward Greece. Despite also being a socialist, the Slovak finance chief often found himself more aligned with former German minister Wolfgang Schaeuble, gaining favor among his conservative counterparts.

Reizniece-Ozola, a 36-year-old chess champion from Latvia’s Union of Greens and Farmers, was the first to submit her candidacy for the job. Still, the race’s only female contender is seen as an outsider and may face uncomfortable questions about her past opposition to the country’s adoption of the euro, even though she has since voiced support for the single currency.

The other non-socialist candidate, Luxembourg’s Gramegna was seen as an early favorite for the race, helped by his experience as a diplomat and his affiliation as member of a liberals-led government coalition. Still, Gramegna is seen among some of his counterparts as lacking the necessary clout for the job, while his nationality could also be a stumbling bloc since another politician from Luxembourg is already heading the European Commission -- the EU’s executive arm.

Originally designed as an informal meeting for finance ministers to exchange views, the group morphed into one of the most closely watched decision-making bodies in Europe. At the peak of the financial crisis the ministers held many, often acrimonious meetings, striking late-night deals on emergency bailouts for five countries, an overhaul of the EU’s banking rules and eleventh-hour loans to keep Greece from defaulting and crashing out of the euro.

While the worst of the crisis is behind the euro area, the next president of the Eurogroup will have their work cut out for them as efforts to reform the euro and push ahead with several controversial reforms pick up steam. Meanwhile negotiations on Greece’s bailout -- the thorniest issue it has dealt with over the past years -- are ongoing, as the country aims to exit its financial rescue program next summer.

“I’m taking part in this process with the intention of contributing to form the necessary consensus to complete the economic and monetary union,” Centeno said in a press conference in Lisbon. “We live in a time of important decisions in the euro zone.”

In a five-page motivation letter seen by Bloomberg -- and accompanied by a photo-embellished CV -- Gramegna outlined his vision for the euro area over the next two years -- the term of the Eurogroup presidency.

Meanwhile, in his letter Kazimir stressed the euro area’s responsibility to set an example and motivate non-euro EU countries as Brexit makes the single currency’s economic prominence within the union greater. “Here, Slovakia can be integrator, a bridge, between ins and outs.”

Skilled Mediator

Dijsselbloem, who took up the post in January 2013, has gained international recognition through his position, representing the euro area in global discussions and acting as an interlocutor between the bloc’s different members. The Dutch social-democrat gained a reputation as a skilled mediator, able to liaise between parties that didn’t always see eye-to-eye and helping to strike compromises at the peak of the Greek crisis in 2015.

“I’m very worried that we are coming into complacency territory,” Dijsselbloem said on Thursday when asked about advice for his successor. “Things are going so well. The banks are better, the economy is better. I see too many politicians relaxing,” he said at a conference in Luxembourg.

“Really, we need to do more work,” Dijsselbloem said.

--With assistance from Aaron Eglitis Zoe Schneeweiss and Radoslav Tomek

To contact the reporters on this story: Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net, Joao Lima in Lisbon at jlima1@bloomberg.net, Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Nikos Chrysoloras, Jones Hayden

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