All presidencies of European institutions are in hands of conservatives. All? No: The Eurogroup, informal meeting of Ministers of Economy and finance of eurozone, resists in hands of Social Democrats. The Portuguese Minister of Finance, Mário Centeno, has achieved today presidency of Eurogroup, in a vote to which also presented liberal Luxemburgish Pierre Gramegna, Slovak socialist Peter Kazimir and liberal Latvian Dana Reizniece-Ozola.Learn More
- The Portuguese Mário Centeno, new president of Eurogroup
- The Portuguese Mário Centeno presents his candidacy to preside over Eurogroup
Centeno, a Harvard professor specializing in labor market, puts symbolic end point to narrative of austerity: Europe, in his opinion, applied a recipe "wrong, partial and incomplete", as he said just a few months ago to this diary, and prescribed reforms and Cutbacks for a fiscal crisis when Great Recession was a polycrisis originating in financial system and was only purely fiscal in Greece. From hand of Germany Angela Merkel and Wolfgang Schäuble, supposed Social Democrat Jeroen Dijsselbloem printed seal of creditors to economic policies of Eurogroup. But Schäuble is gone. And successor of Dutch Dijsselbloem, Rye--supported by Spain in that election--, has opportunity to pass page definitively. "It's opportunity to write a new script for eurozone," he said in a hearing before press.
Centeno is part of leftist coalition that governs in Portugal, almost a rarity in Europe. and has applied reforms and cuts, but defends a different timing, combined with demand-stimulus policies. "The fundamental lesson [of European crisis management] is that reforms need time, in addition to demand policies, to work." That is not recipe for Brussels: That is why we must explain it in Eurogroup. But that's got to be recipe on left. It works: In Portugal we have passed budgets with restrictions, but we have not stigmatized demand policies. It would be even better if y were European stimulus policies, because limits for countries like Portugal are obvious. We have managed to make demand policies and reduce fiscal burden of our coalition partners, but within rules, he said to country in June.
"We need to strengn eurozone," he said in his first press conference, "taking lessons from what we have already done and completing what is still lacking." The Euro Summit, in middle of month, will be first litmus test, following proposals of European Commission for Economic and Monetary union reform, to be presented this Wednesday. Brussels aims to turn aid mechanism (ESM) into a European Monetary Fund that rescues troubled countries and serves as a firewall for closing banks. It has also designed an anticrisis budget for euro less ambitious than it initially seemed. And he wants a finance superminister who is vice-president of Commission and presides over Eurogroup for 2020, when mandate of rye expires, which will start its presidency in January. "The eurozone has taken great strides in recent times, but much remains to be done to ensure financial stability, return to convergence, and increase euro's resilience," said Centeno. "There is a great consensus in Eurogroup for all that," he said.
But that consensus is today a gruyere cheese with a hole in middle: Rye is aware that German government is in office. And he knows that once he becomes successor of Dijsselbloem, for his work it will be essential to know name of Schäuble's successor, a true chieftain of Eurogroup for almost a decade.
The new president should align himself with more expansive economic policies and traditional positions of social democracy, in a eurozone that has emerged from Great Recession thanks to Draghi's monetary policies, despite austere bias of politics Fiscal. That is twist that many expect from Portuguese finance holder. But, for now, arrival of Rye is also farewell of author of this sentence, Jeroen Dijsselbloem: "I can not spend all my money on liquor and women and n ask for help."